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Toyota unit Hino expects FY23 operating profit despite engine data scandal By Stocksak


© Stocksak. FILE PHOTO: Hino Motors Ltd displays its new Hybrid Profia, a diesel-hybrid version of its large commercial truck model at its R&D Centre at Hino in Tokyo, Japan July 17, 2018. REUTERS/Naomi Tajitsu

TOKYO (Stocksak), Thursday, Tokyo Motor Corp’s truck- and bus unit Hino Motors forecasted a 6 billion yen operating loss for the fiscal year ending March 2023. This is despite analysts’ predictions of a loss due an engine data scandal.

It did not report operating income or net profit forecasts for the previous year because it was unable “reasonably to calculate losses” due to the engine data scandal.

The truck maker became mired in a reputation-tarnishing emissions data scandal this year affecting 640,000 vehicles after admitting to falsifying data on some engines dating back to 2003.

Based on the average forecast of 10 Refinitiv analysts, it was expected to experience an operating loss of 16.2 trillion yen in the current year.

However, the operating profits forecast by the company were still 82% below the previous financial years.

Hino stated that its profit forecast was based upon predictions for an overseas sales increase of 22% over year-ago levels and a drop in domestic sales of 36%.

After suspending shipments to some models in August, the company said it had resumed delivering medium-sized and small-size trucks to its home market since September.

For the July-September quarter Hino posted a quarterly operating loss of 12.3 billion Japanese yen ($84.66m), 21% lower than the previous year, but still well above the average forecast of a 1.66 billion profit made by seven analysts in a Refinitiv survey.

Despite the drop in domestic sales of 33% during the first six months, Hino’s sales to Indonesia and Thailand increased due to strong demand and the resumption production in the United States. This had been suspended between October 2020 and December 2020.

The Japanese truckmaker is now facing a class-action lawsuit in America. In it, the parent Toyota and Hino are accused of historical misconduct. Hino and its Australian subsidiary are facing another lawsuit from customers that purchased, leased, or acquired its truck.

Satoshi Ogiso, president of Hino, declined to comment on the possible effects of the lawsuits on business performance.

Ogiso said that “we are still in the process to carefully consider and proceed with the response.”

Toru Matsukawa from Hino Finance answered the question about whether Toyota would need financial support.

In 2001, Hino was made a Toyota subsidiary. Since then, almost all Hino presidents have been Toyota employees.

Three executives and one senior official resigned earlier this month due to the scandal.

Ogiso, who worked for Toyota for many years before becoming Hino’s president 2021, was disciplined and forced to forfeit half of his compensation for six month.

Hino said that a corporate culture that was inward-looking and a lack of communication with workers created an environment in the workplace where more emphasis was placed on meeting numerical targets and scheduling than on following through.

($1 = 145.2900 yen)

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