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Toyota notches record result

A weaker yen has helped Toyota's performance in 2001-02
A weaker yen has helped Toyota's performance in 2001-02  

Staff and wires

TOKYO, Japan -- Japan's No. 1 carmaker Toyota Motor posted a record profit of $8.75 billion Monday, aided by the weaker yen and strong demand for its Lexus luxury range.

The figure was in line with market expectations, with Toyota stock closing 0.85 percent higher at 3540 yen before the earnings announcement.

The broader market, measured by the Nikkei 225 average, was down 1.68 percent.

Toyota said its consolidated operating profit for the year that ended in March was 1.12 trillion yen ($8.75 billion). That was a gain of more than 29 percent on the previous year.

Toyota's record profit follows impressive results last week from its smaller rival Nissan Motor, which is the turnaround success story of the year under chief executive Carlos Ghosn.

Mitsubishi Motors, 37 percent owned by DaimlerChrysler, also reported earnings Monday, showing it too had engineered a successful turnaround. Its stock jumped more than 2 percent after the announcement.

But chief operating officer Rolf Eckrodt said Mitsubishi was only in the first stages of its restructuring.

Mitsubishi's net profit for the year ended March was 11.26 billion yen (about $88 million), compared with a loss of 278 billion yen the previous year.

Tokyo-based auto analyst for HSBC Securities, Chris Richter, told CNN Monday that Japan's motor vehicle industry was divided into "two casts of players".

One set, exemplified by Toyota, Nissan and Honda, was doing very well and challenging their global competitors.

Making strides

Richter said the second set included companies such as Mazda and Mitusbishi, which essentially were undergoing restructuring.

He said they were making strides towards their goals.

A major driver of profit growth for Toyota and other Japanese carmakers was the softer Japanese currency, which makes exports more profitable and inflates the yen value of income earned abroad.

Models like the Lexus are popular in the U.S. and are highly profitable for Toyota.

The yen declined to around an average 125 to the dollar in the past business year compared with 110 for the previous year.

"In times of yen weakness, Lexus is just a treasure chest," Kurt Sanger, an auto analyst at ING, told Reuters news agency.

Mitsubishi likewise benefited from a weaker yen, along with a strict cost-cutting appoach. Eckrodt said the No. 4 carmaker would consolidate its business and move to profitable growth in the years ahead.

Mitsubishi jumped sharply after its earnings announcement, closing 2.31 percent higher at 398 yen.

Nissan, which was down in the morning session, finished the day 0.91 percent higher at 997 yen, while Honda closed 0.87 percent lower at 5730 yen. No. 5 maker Mazda put on 2.34 percent to 393 yen.

Toyota also said it would seek shareholder approval for a $4.7 billion share buyback, covering 170 million shares.




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