Japanese automotive giant, Toyota, reported a rise in first-half’s net profit on Tuesday, and raised its forecast for the whole year, citing a cheaper yen and cost-cutting efforts.
Japan’s number-one car maker said that its net profit rose 13.2 percent to 1.07 trillion yen ($9.4 billion) for the six months on sales of 14.2 trillion yen, up 8.6 percent.
The Prius maker now expects to bank a net profit of 1.95 trillion yen for the fiscal year ending March 2018, up from an earlier estimate of 1.75 trillion yen.
During the previous fiscal year, Toyota suffered its first drop in annual profit in five years. Toyota claimed it was the result of the cost of customer incentives in the key US market.
Toyota said operating profit from its domestic and European markets showed moderate gains for the first half. But operating profit from North America more than halved due to a decline in sales and swelling incentives.
“Toyota has benefited from a weak yen, but growing incentives in North America have pressured its profit,” said Satoru Takada, an analyst at TIW, a Tokyo-based research and consulting firm. “Foreign exchange will remain a decisive factor for the second half,” Takada said before the announcement.
The level of Japan’s currency against the dollar and other units is a key factor in Toyota’s competitiveness abroad and in the value of profits it earns internationally.