Japan's Toyota Motor Corp (TMC), the world's largest automaker, announced its worst annual loss of 436.9 billion yen ( $4.4-billion) for the fiscal year ended 31 March 2009 and forecast further losses this year on account of declining sales in the wake of the global economic downturn.
In its 72-year history, the company has reported an annual net loss for the second time after 1963 against a record profit of 1.72 trillion yen last year.
TMC's revenue slipped to 20.53 trillion yen, decrease of 21.9 percent compared to the last fiscal year revenue of 26.29 trillion yen.
TMC's operating income decreased from 2.27 trillion yen to a loss of 461 billion yen, and income before income taxes, minority interest and equity in earnings of affiliated companies was a loss of 560.4 billion yen.
TTMC's global sales fell 15 per cent to 7.57 million vehicles over the year, with sales in the domestic market dropped by 243,000 units to 1.95 million vehicles.
TMC also announced a cash dividend for the full fiscal year of 100 yen per share, a decrease of 40 yen over the last fiscal year.
TMC was badly hit in its traditionally most profitable region North America with sales recording 2.21 million units, a decrease of 746 thousand vehicles.
In Europe, sales were 1.06 million vehicles, a decrease of 222 thousand units, while in Asia, sales recorded 905 thousand units, a decrease of 51 thousand units. In Central and South America, Oceania, Africa and the Middle East etc., sales recorded were 1.44 million units, a decrease of 84 thousand units.
The company forecasts a consolidated vehicle sales for the current year to be 6.5 million units, decrease of 1.06 million units from last year, due to continuance of the current severe global conditions..
TMC predicts an even worse performance in the current business year with a consolidated net revenues of 16.5 trillion yen, operating loss of 850 billion yen and net loss attributable to Toyota Motor Corporation of 550 billion yen for the year 2009, based on an exchange rate of 95 yen to the U.S. dollar and 125 yen to the euro.
TMC president Katsuaki Watanabe said, "Both revenues and profits declined severely during this period. The negative impact was a consequence of the significant deterioration in vehicle sales particularly in the US and Europe, the rapid appreciation of the yen against the US dollar and the euro and the sharp rise in raw materials."
TMC's consolidated sales for FY 2009 totaled 7.57 million units, a decrease of 1.34 million units from the last fiscal year.
TMC's operating income decreased by 158.5 billion yen, to a loss of 72 billion yen compared to the last fiscal year in the financial services segment, This included 80.2 billion yen of valuation losses from interest rate swaps.
Excluding the valuation losses, operating income decreased by 146.3 billion yen to 8.2 billion yen. Higher outstanding loan balances and improved lending margins were offset by an increase in allowance for credit and residual value losses mainly in the US.
"It appears to take some more time before the financial markets in the US and Europe normalise and the global economy recovers.'' said President Watanabe.
TMC plans to accelerate its profit in the 2010 fiscal year by expanding the hybrid vehicle line-up such as the next generation Prius in May and the Lexus' HS250h in July.
For years, Toyota with its Prius hybrid has enjoyed a monopoly of sorts in the US market for environment-friendly vehicles. Seeing Toyota's succes with the Prius, Japanse rival Honda launched its hypbrid Insight below $20,000 that will force Toyota to slash prices. (See: Toyota may slash Prius prices to meet Insight challenge)
TMC will launch four hybrid models in Japan and three models overseas within this fiscal which will improve the total profit of the current year around 800 billion yen.
TMC dethroned its rival General Motors Corporation of the US as the world's biggest automaker when it outsold the latter by around 90,000 vehicles in the first quarter of the 2007(See: Toyota overtakes GM in first quarter global vehicle sales)
In December, TMC shed jobs, right from top management to blue-collar workers to cut down cost. (See: Toyota may reshuffle top management, shed jobs in the US and UK)
In February, TMC to cut cost freezed wages and offer voluntary redundancy to plant workers in North America for the first time as it widens output cuts to adjust for slumping vehicle demand. (See: Toyota plans production cuts, job reductions in North America)
TMC President Katsuaki Watanabe, will soon be replaced by Akio Toyoda, the grandson of the automaker's founder.
The company is on the move and is using technology to develop an innovative environmeatal vehicle in its quest to dominate alternate-fuel vehicles. (See: Toyota secretly developing total solar energy powered car)