Toyota Q4 profit plunges

Toyota Motor on Wednesday said fourth quarter net profit tumbled 77 % due to a strong yen and the impact on production of Japan's biggest recorded earthquake and a tsunami. Like many of its Japanese peers, it declined to give a forecast for the current year as it assesses the impact of the March 11 disaster, but it said it expected output to "normalise" globally in June, earlier than first thought. The 9.0-magnitude earthquake and the resulting tsunami hammered production, shattered supply chains and crippled electricity-generating facilities, including a nuclear power plant at the centre of an ongoing atomic emergency. Amid power and parts shortages, Toyota had announced production disruptions domestically and in the United States, European Union, China and Australia because of the crisis, temporarily slowing output or shutting plants. Toyota president Akio Toyoda told reporters: "Our efforts to bring production to normal are advancing. At home and overseas, we are expected to recover some 70 % of normal levels by June." His prediction is more optimistic than last month's forecast of normalisation by July in Japan, and worldwide by August. Many key component manufacturers in Japan are based in the worst-hit northeast regions, where facilities were damaged by the earthquake or inundated by the giant wave that followed. Toyota said net profit for January-March dived 77 % to 25.4 billion yen ($314 million) while operating profit tumbled 52 % to 46.1 billion yen. For the year that ended in March, operating profit more than tripled from a year earlier to 468.2 billion, but was cut by 110 billion yen ($1.36 billion) as a result of the March 11 disasters' impact on production. Toyota said net profit in the year to March doubled to 408.1 billion yen, but missed a February forecast for 490 billion yen. The automaker did not give an estimate for the current year, saying only that "more time is needed to complete the examination of production and sales plans due to the impact of the Great East Japan Earthquake". Toyota faced the prospect of a Moody's downgrade to its long-term credit rating last month because of the seismic disaster. Standard & Poor's cut its rating on the automaker earlier this year. Analysts say Toyota is particularly exposed in terms of its thin operating margins in comparison to its peers, partly due to quality-related expenditures as it looks to recover from the impact of millions of safety recalls. The automaker is attempting to rebuild a reputation damaged by millions of recalls worldwide over safety issues. Previously lauded for its safety, Toyota became mired in crisis when it recalled nearly nine million autos between late 2009 and February last year due to brake and accelerator defects alleged to have caused dozens of deaths. The crisis dealt a huge blow to the firm's reputation, prompting predictions it would lose market share as it tightened its recall policy to encompass around 16 million vehicles between late 2009 and January this year. In January Toyota announced global sales of 8.42 million vehicles in 2010, just ahead of General Motors' 8.39 million, but analysts say the impact of the March 11 disasters will pressure its position as the world's biggest carmaker.