Toyota Motor Corporation (TMC) recently announced record highs in operating results and net income for the recently concluded fiscal year, which ended March 31, 2006.

On a consolidated basis, net revenues increased 13.4 percent year-on-year to 21.03 trillion yen. Operating income reached 1.87 trillion yen, an increase of 206 billion yen, or 12.3 percent, over the previous fiscal year. Net income increased 17.2 percent to 1.37 trillion yen, representing the third consecutive year in which net income exceeded one trillion yen. All of these figures marked record highs.

Positive contributions to operating income included 300 billion yen from the positive effects of changes in exchange rates, 240 billion yen from marketing efforts and 130 billion yen from cost reduction efforts. These gains offset the negative effects of an increase in expenses of 307.3 billion yen and the effect of special factors of 156.5 billion yen. TMC president Katsuaki Watanabe was elated at the results. "Earnings trended upwards in the latter half of the fiscal year, resulting in positive year-on-year growth for the entire year. Although the effects of foreign currency exchange rates were contributing factors, Toyota's performance demonstrated the strength of our company's ongoing operational efforts," said Watanabe.

TMC also announced a second-half cash dividend of 55 yen for the last six months of the recently concluded fiscal year, an increase of 15 yen per share compared with the corresponding period of the previous fiscal year. This means total dividend payout for the full year will be 90 yen per share, an increase of 25 yen year-on-year, and that TMC will have increased its dividend for seven consecutive terms. Watanabe commented that regarding shareholder return policy, the company plans to increase payout ratios. "As for dividend payout, we have been aiming to steadily increase the payout ratio to 30 percent on a consolidated basis, and we plan to propose, at the general shareholders' meeting, a one-year share buy back program of up to 30 million shares or 200 billion yen."

In fiscal year 2006, Toyota's consolidated vehicle sales increased to 7.974 million units.

In Japan, while new models such as the Ractis, Vitz and Belta were well-received by customers, sales of existing models (including the Ist, Wish and Crown) decreased amid weak market demand. Consolidated vehicle sales decreased by 17 thousand vehicles to 2.364 million vehicles. Toyota's market share (excluding mini-vehicles) was 44.3 percent, exceeding 40 percent for the eighth consecutive year.

Sales in North America reached 2.556 million vehicles (an increase of 285 thousand vehicles) mainly due to steady sales of all-new models such as the Avalon and Tacoma and of other popular models, including the Prius hybrid and the Scion model range. In Europe, the newly introduced Aygo contributed to a sales increase of 44,000 vehicles to 1.023 million vehicles. Sales in Asia increased by 47,000 vehicles to 880,000 vehicles, mainly due to strong sales of IMV (Innovative International Multi-purpose Vehicle) models.

In other regions (including Africa, Oceania, South America and Central America), sales improved to reach 1.151 million vehicles, an increase of 207,000 units. The startup of IMV production in south-of-the equator countries such as Argentina and South Africa contributed to the sales increase.

TMC also announced its consolidated financial forecast for the fiscal year (ending March 31, 2007). Based on an exchange rate of 110 yen to the U.S. dollar and 135 yen to the euro, TMC forecasts consolidated net revenues of 22.3 trillion yen, operating income of 1.90 trillion yen and net income of 1.31 trillion yen. TMC estimates that consolidated vehicle sales for the fiscal year ending March 31, 2007 will be 8.450 million vehicles. Watanabe concluded by commenting on the outlook for profitability. "Our business environment will remain severe, with a significant increase in raw material prices and competition intensifying. However, we wish to achieve results that exceed our latest financial results while continuing investment for future growth."