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Toyota Plans to Resume Multi-Billion Dollar Share Buyback Program as Operating Income Forecast to Grow in Fiscal 2022

05/12/2021 02:04

05:54 AM EDT, 05/12/2021 (MT Newswires) -- Japanese automaker Toyota Motor (TM) unveiled on Wednesday a share buyback program of up to 250 billion yen ($2.30 billion) as it forecast higher earnings in fiscal 2022 due in part to higher electric vehicle sales.

The company, which had suspended its share repurchase program last year following the outbreak of the COVID-19 pandemic, said it plans to buy back shares in a "flexible manner," taking into account factors such as liquidity and investment in growth.

The auto manufacturer, headquartered in Japan's Aichi Prefecture, also unveiled a 135 yen per share year-end dividend, bringing total payout for fiscal 2021 to 240 yen per share, an increase of 20% from a year ago.

Effective Oct. 1, the company will split its common stock in a ratio of 5-for-1 to make it "easier" for investors by lowering the entry barrier.

Vehicle sales for the fiscal year ending March 2022 are expected to be 8.7 million units, with sales expected to increase in each region. That's a surge of 114% from a year earlier when volumes declined "significantly" in the first half due to the impact of the coronavirus crisis.

Toyota expects to sell 2.8 million units of electric vehicles in fiscal 2022, up 130% compared with the previous year. It anticipates the ratio of electrified vehicles will increase up to 29%.

Those unit sales are forecast to result in revenue of 30 trillion yen and 2.5 trillion in operating income in fiscal 2022. That compares with 27.2 trillion yen and 2.2 trillion yen, respectively, for the full-year ended March.

The company said a reduction in expenses and cost cutting contributed to the 10 billion yen increase in its operating income from the prior-year period, with North America and Asia adding to earnings while Europe and Japan being the main detractors.

For the year ahead, the company still anticipates a 135 billion yen hit to its operating income as a "significant negative impact of increased prices of materials" will likely outweigh 300 billion yen in planned improvements to boost earnings.

Further, a projected increase in the company's expenses in the year ahead will undermine operating income by 350 billion yen, reflecting investments in "more resources than ever in carbon neutrality and digitalization."

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