The interim results for Toyota SA-holding company Wesco show that although the Prospecton-based manufacturer’s turnover increased by 27,8 per cent, it made a R126-million loss last year.
The interim results for Toyota SA-holding company Wesco show that although the Prospecton-based manufacturer’s turnover increased by 27,8 per cent, it made a R126-million loss last year.
Wesco, which holds 25 per cent of Toyota SA, is the listed investment vehicle of the Wessels family. CARtoday.com reported that the company reduced its stake in Toyota SA from 64 to 25 per cent last year in a R1-billion deal with Toyota SA’s Japanese parent.
According to , Toyota SA was hit badly by the weak rand in the first part of the year. But Wesco said substantial investment in Toyota SA “was expected to return the company to profitability in the medium term”.
Wesco said in the report that Toyota SA’s turnover jumped 27,8 per cent last year from R8,4 billion to R10,7 billion. There was a marginal improvement in market share from 22,6 to 23,1 per cent, although sales fell from 83 059 to 80 777 units.
“A loss of R126m was recorded (for Toyota) for the 12 month period, with the latter six months showing an improvement as anticipated,” Wesco reported.
Toyota SA chief executive Johan van Zyl explained that Toyota’s lack of profitability last year had been expected, and was largely due to the weakness of the rand.
“Although we put up our prices, we could not catch up with the deteriorating currency – not just last year, but in previous years,” he said. “However, the recovery of the rand towards the end of last year helped, and if things continue as they are, we will return to profitability this year.”
Van Zyl added that the deteriorating rand also hit the value of Toyota’s local content.
The payment of R1 billion for a controlling stake in Toyota SA by the Japanese parent appeared to largely explain Wesco’s turnaround in cash reserves from a cash outflow of R244 million in 2001 to a cash increase of R818 million last year.
However, “the rand’s relative strength will increasingly impact on the profitability of exports, and an improvement on 2002 will be difficult,” the Wesco spokesman added.
