Toyota Expects Iran War To Affect Its Profit

Toyota expects an operating profit of 3.0 trillion yen (over 16 billion euros), compared with a result of 3.77 trillion yen in the past fiscal year. The profit forecast is much lower than expected. Analysts had on average projected nearly 4.6 trillion yen. The automaker already reported last week that car sales in the Middle East fell sharply in March due to disruptions in deliveries to the region.

Net profit is expected to fall by 22 percent this year. In the past fiscal year, net profit already fell by more than 19 percent, partly due to the import tariffs imposed by US President Donald Trump. Revenue rose by 5.5 percent last year to 50.7 trillion yen, and for this year the company expects virtually the same revenue of 51 trillion yen. That, too, is less than analysts had expected.

Toyota’s profit forecast is the first under new CEO Kenta Kon, who took office last month. The former financial director of Toyota and assistant to Chairman Akio Toyoda is under pressure to increase profitability. He must steer the automaker through the current difficult market conditions, which are the result of US import tariffs and the war in the Middle East.

• Read More: Could Toyota Fit A Turbo In The RAV4?