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Toyota(TM.US) expands stock buyback to 1.2 trillion yen

AInvestTuesday, Sep 24, 2024 5:40 am ET
1min read

As Toyota(TM.US) sees strong demand in key markets including Japan, Europe and North America, the world's largest automaker has increased its stock buyback to 1.2 trillion yen ($83 billion).

The Japanese manufacturer added 2 trillion yen to the 10 trillion yen stock buyback plan it announced in May, according to a filing to exchanges on Tuesday. That means it could buy up to 3.93% of its shares, based on its current share count. The company said the decision was based on "recent share price levels."

Toyota's shares are currently trading at levels not far from where they were in January, up just 1% this year, while the Nikkei 225 has gained 13.4%. Meanwhile, Toyota is delivering strong financial results.

Operating profit at the automaker rose 17% to 1.31 trillion yen in the three months ended June 30. Its hybrid vehicles are selling well in the North American market, while a weaker yen has helped boost Toyota's revenue in yen terms.

The stock buyback plan announced in May will continue until April 2025, Toyota said in a statement.

The increased buyback also fits with broader efforts by the Japanese government to unwind decades-old cross-shareholdings among large companies to solidify business ties.

As part of a broader effort to unwind strategic stakes in financial partners, Toyota said in July it would buy back 8,068 billion yen of its shares from major Japanese banks and insurers.

According to earlier reports, Mitsubishi UFJ Financial(MUFG.US) and SMFG.US) will start unwinding their strategic stakes in Toyota worth 1.32 trillion yen.

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