Toyota raises buyback to 1.2 trillion yen, citing share levels

TOYOTA Motor bumped up the size of its share buyback to 1.2 trillion yen (S$11 billion) as the world’s largest carmaker enjoys strong demand in Japan and Europe.

The Japanese automaker said it would increase a one trillion yen stock repurchase plan announced in May by 200 billion yen, according to an exchange filing on Tuesday (Sep 24).

That means the company will likely buy back as much as 3.93 per cent of its shares. The decision was based on “recent share price levels,” Toyota said.

Toyota’s stock is largely flat versus January levels, up just 1 per cent this year versus the Nikkei 225’s 13.4 per cent advance. At the same time, Toyota is delivering robust financial results.

The carmaker’s operating profit for the three months ended Jun 30 was 1.31 trillion yen, 17 per cent higher than a year earlier. Its hybrid models are selling well in North America while a weaker yen is helping to boost income in Toyota’s home currency.

The enhanced buyback is also in line with the Japanese government’s wider push to get big enterprises to unwind cross-held shareholdings forged over decades to cement business relationships.

In July, Toyota said it would buy back 806.8 billion yen of its stock from major Japanese banks and insurers as part of a broader push to unwind strategic shareholdings with financial partners. BLOOMBERG