Toyota plans $1.8bn share buyback after strong Q2

Toyota Motor Corp. has lowered its forecast for annual global car sales by 2.7 percent to 10.7 million units, weighed by weakening demand in India, Indonesia and Thailand. (AFP)
Updated 07 November 2019

Toyota plans $1.8bn share buyback after strong Q2

  • Operating profit rises 14% as automaker enjoys its strongest second quarter since 2015

TOKYO: Toyota Motor Corp plans a $1.8 billion share buyback, Japan’s biggest automaker said, after beating quarterly forecasts on higher global vehicle sales and an improved performance in North America.

Operating profit rose 14 percent to 662.3 billion yen ($6.1 billion) for the three months to Sept. 30 as Toyota enjoyed its strongest second quarter since 2015.

The profit beat an average forecast of 592.3 billion yen, based on estimates from nine analysts, Refinitiv data showed.

It sold 2.75 million vehicles globally, up from 2.18 million a year earlier.

Sales in North America, Toyota’s biggest market, rose 5.6 percent, while sales in Asia climbed 3.4 percent. Operating profit in North America, which has been a sore spot for Toyota over the past two years, more than doubled helped by less discounting.

“New models of the RAV4 and the Corolla, as well as last year’s Camry, have been well received in North America, so we’ve been able to lower incentives,” Operating Officer Kenta Kon said.

Toyota said it would buy back up to $1.8 billion worth of its common stock, or 34 million shares, by end-March.

It maintained its forecast for operating profit in the year to March to fall 2.7 percent, after three years of gains, as it expects a strengthening yen to weigh.

It lowered its forecast for annual global car sales by 2.7 percent to 10.7 million units, weighed by weakening demand in India, Indonesia and Thailand. Still, it expects record sales topping last year’s 10.6 million.

Toyota’s projected profit slip is subdued versus smaller rivals including Mitsubishi Motors, Subaru and Mazda, which have slashed their full-year outlooks by up to 67 percent this month amid weaker demand for their cars.

Many of them acknowledge they are struggling to contain costs.


OPEC and its allies meet to discuss oil output cuts

Updated 06 June 2020

OPEC and its allies meet to discuss oil output cuts

  • The meeting, originally scheduled for next week, was brought forward to Saturday

VIENNA: OPEC and its allies were holding talks via video conference Saturday to assess their current deal to slash production as oil prices tentatively recover on easing coronavirus lockdowns.
The 13-member group and other oil producing nations such as Russia and Mexico are discussing an agreement reached in April to boost prices, which have plummeted over falling demand as countries around the world have imposed strict lockdowns to stop the spread of the new coronavirus.
The meeting, originally scheduled for next week, was brought forward to Saturday at the suggestion of Algerian Oil Minister Mohamed Arkab, who currently holds the rotating presidency of the Organization of Petroleum Exporting Countries.
Under the terms of the April agreement, OPEC and the so-called OPEC+ pledged to cut output by 9.7 million barrels per day (bpd) from May 1 until the end of June.
The reductions would then be gradually relaxed from July, with 7.7 million bpd taken off the market from July to December.
But at Saturday’s talks, crude producers were expected to discuss extending the 9.7 million bpd beyond June, even if agreement might prove difficult to reach.
The April deal was signed after days of wrangling between major players, whose revenues have been ravaged by the collapsing oil market this year.
“It seems very likely the May-June cuts will be extended by another month,” said Bjornar Tonhaugen, analyst at Rystad Energy.
Some market observers are expecting the cuts to be extended still further, possibly until the end of the summer or even until the end of the year.
Although more countries around the world are gradually moving out of lockdown, crude consumption has not returned to pre-confinement levels, which had already been comparatively low.
As in previous negotiations, discussions could prove particularly tense between Russia and Saudi Arabia, the deal’s two heavyweights who became involved in a short but bitter price war when previous talks broke down in March.
Mexico, which held up the April deal before it was eventually finalized, has also already ruled out any further drop in oil production with its president, Andres Manuel Lopez Obrador, saying on Friday his country “could not adjust our production further.”
Another major bone of contention could be the willingness of each country to abide by the agreed production quotas, suggested RBC analyst Al Stanton.
According to data intelligence company Kpler, OPEC+ reduced output by around 8.6 million bpd in May, a smaller cut than planned, with Iraq and Nigeria seen as the main culprits.
Nigeria’s Ministry of Petroleum Resources said in a tweet Saturday that it backed discussions to allow countries which failed to conform fully to the agreed cuts in May and June to make up for it in July, August and September
Despite the difficulties, the output cuts have helped support oil prices, which rose to around $40 per barrel at the start of June for both the US benchmark, West Texas Intermediate (WTI), and Europe’s Brent North Sea contracts.
Around April 20, both had slumped to historic lows, with Brent falling as low as $15 and WTI even entering negative territory.