Toyota Hino unit expects FY23 operating profit despite engine data scandal

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TOKYO (Reuters) – Toyota Motor Corp’s truck and bus unit Hino Motors on Thursday forecast operating profit of 6 billion yen for the fiscal year ending March 2023, confusing analysts’ forecasts regarding a loss due to an engine data scandal.

However, it did not disclose its operating profit and net profit forecast for the year, as it was unable to “reasonably” calculate the losses attributed to the engine data scandal.

The truckmaker was mired this year in a reputation-damaging emissions data scandal that affected 640,000 vehicles after it admitted to falsifying data on some engines dating back to 2003.

And it was expected to incur an operating loss of 16.2 billion yen for the current fiscal year, based on the average forecast from a Refinitiv survey of 10 analysts.

Nevertheless, the company’s expected operating profit was still down 82% from the prior year.

Hino said its profit forecast was based on forecasts of a 22% increase in overseas sales from year-ago levels and a 36% decline in domestic sales.

It said that since September it had resumed delivery of mid-size and small-size trucks to the domestic market, after suspending shipments of some models in August due to the scandal.

For the July-September quarter, Hino posted a quarterly operating profit of 12.3 billion yen ($84.66 million), 21% lower than a year earlier, but easily beating the average forecast for earnings of 1.66 billion yen given by a Refinitiv survey of seven analysts. .

Although domestic sales fell 33% in the first six months of the fiscal year from April, Hino’s sales to Indonesia, Thailand and the United States surged during the period. due to high demand and the resumption of production in the United States, which had been suspended between December 2020 and October 2021.

The Japanese truckmaker is facing a class action lawsuit in the United States, in which it and its parent company Toyota have been accused of historical misconduct. Hino and its subsidiary in Australia are facing another lawsuit from customers who have purchased, leased or acquired its trucks.

Hino Chairman Satoshi Ogiso declined to comment on the impact any damages from the lawsuits could have on the company’s performance.

“We are still in the process of carefully considering and proceeding with the response,” Ogiso said.

Asked if financial support would be required from Toyota, Hino’s chief financial officer, Toru Matsukawa, said funding was not an issue for the company.

Hino became a subsidiary of Toyota in 2001, and nearly all of Hino’s presidents since have been Toyota employees.

The scandal led to the resignation of three executives and a senior civil servant earlier this month.

Ogiso, who worked for Toyota for a long time before becoming president of Hino in 2021, kept his job but showed discipline and had to give up half his salary for six months.

Hino said an inward-looking company culture and an inability by management to engage enough with workers had created an environment in which higher priority was given to meeting schedules and targets. as well as process monitoring.

($1 = 145.2900 yen)

(Reporting by Satoshi Sugiyama; Editing by Muralikumar Anantharaman & Simon Cameron-Moore)

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