TOKYO - Toyota Motor Corp. and Mitsubishi Motors Corp. profits in the first half that ended Sept. 30 were hammered by a strong yen, especially against the euro, and by the need to set aside funds to cover pension liabilities.
Mitsubishi also was hit by falling sales in Japan as consumers continued to react to disclosures that it hid defect information from the government for more than 20 years.
While Toyota's net income slumped 21 percent from the year-earlier period, Mitsubishi posted a record first-half loss of ¥75.6 billion, or $700 million at current exchange rates. Mitsubishi also forecast that its full-year net loss would be a record.
Meanwhile, Daihatsu Motor Co.'s results underscored the importance of the home market. Strong sales in Japan pushed its net up 74 percent.
Results in this story and accompanying table are consolidated, meaning they include most subsidiaries.
TOYOTA MOTOR CORP.
Record first-half unit sales - reflecting strength both at home and in the U.S. market - and cost cutting more than offset a $1.7 billion reduction in operating profit from exchange rates. The stronger yen means that less revenue and profits are booked for every euro or dollar received from overseas sales.
Toyota took a one-time charge of $3.2 billion to cover pension liabilities. It offset that somewhat by an extraordinary gain of $2.5 billion on the sale of securities, specifically to fund its retirement plans.
While Toyota posted an operating loss of $24 million in Europe, it was in the black in all other regions.
MITUSIBSHI MOTORS CORP.
Mitsubishi posted an operating profit of $194 million in North America but was in the red everywhere else, including operating losses of $179 million in Japan, $123 million in Europe and $33 million in Australia.
Mitsubishi also took a charge of $593 million for pension liabilities and a $97 million charge for the costs of the recall scandal and a resulting service campaign.
Mitsubishi forecast a record net loss of $1.3 billion for the full fiscal year ending March 31, 2001, double the amount it had forecast in May. It predicts an operating loss of $277.7 million for the full fiscal year.
Mitsubishi President Takashi Sonobe vowed to return the company to the black in the next fiscal year.
DAIHATSU MOTOR CO.
Profit surged 74.1 percent for the first half of the fiscal year as strong home sales and cost cutting offset sluggish business and unfavorable exchange rates.
Daihatsu, owned 51 percent by Toyota, benefited from better sales of compact cars and minicars - those with engines smaller than 660cc. It also benefited from cost cuts and sales of some companies' shares from its portfolio. Those efforts offset a $238.6 million one-time charge to cover a shortfall in its pension reserve.
Yuzo Yamaguchi in Tokyo contributed to this report