Toyota and Honda expected to report lower operating profits for 2020, Nissan to post another year of loss

Japanese automakers are due to announce their 2020 financial performance later this week, Reuters reports, and early estimates have Toyota, Honda and Nissan set to announce lower earnings than in 2019, very much expected given the Covid-19 pandemic and, in more recent times, the microchip shortage that has impacted production.

Based on consensus estimates from two dozen analysts, Toyota, the world’s largest automaker by vehicle sales last year, is expected to report an operating profit of 2.1 trillion yen (RM79.2 billion) for the year ending March 2021, a 12.5% drop from the 2.44 trillion yen (RM92.1 billion) it achieved the year before.

While there is a drop, the anticipated profit is far better than that originally forecast by the company in May last year during the initial stages of the pandemic. Back then, the automaker said it expected its full-year operating profit to drop by 80% to around 500 billion yen (RM18.87 billion), which would have been its lowest in nine years. Profit is anticipated to increase to 2.6 trillion yen (RM98.2 billion) in the current fiscal year, which started on April 1.

Honda, meanwhile, is likely to report an operating profit of 560 billion yen (RM21.2 billion), an 11% reduction from the 634 billion yen (RM24 billion) it posted last year. Analyst estimates suggest that the company’s profit is likely to rebound to around 791 billion yen (RM29.9 billion) in the current business year.

As for Nissan, it is expected to report an operating loss of 142 billion yen (RM5.4 billion), widening from the 40.5 billion yen (RM1.53 billion) loss the year prior, when it reported a net loss of 671 billion. The situation is however more positive than originally thought – in July last year, citing Covid-19 and the challenging business climate that had come about as a result of the pandemic, it had projected a 470 billion yen (RM17.8 billion) operating loss for fiscal 2020.

Things haven’t been good at the beleaguered automaker, but there may be signs that it is turning the corner, at least where operating profit is concerned, with the company likely to swing to an operating profit of 141 billion yen (RM5.32 billion) in the current business year, according to analytical estimates from Refinitiv SmartEstimate. Achieving a net profit, however, may take a while longer.

The post Toyota and Honda expected to report lower operating profits for 2020, Nissan to post another year of loss appeared first on Paul Tan's Automotive News.

from Paul Tan's Automotive News
Read The Rest:paultan...