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Toyota boosts profit outlook on weaker yen, but warns of production risks

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November 4, 2021

By Tim Kelly

TOKYO (Reuters) – Japan’s Toyota Motor Corp raised its profit outlook on Thursday helped by favourable currency rates but warned that the global semiconductor shortage still posed risks to its full-year production plans.

Like other global automakers, Toyota has been forced to cut output due to the chip shortage and lockdown measures that have slowed component production at factories in Malaysia and Vietnam, even as vehicle demand around the world rebounds from a pandemic slump.

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It has already cut its production target for the year to end-March once to 9 million vehicles and last month slashed November output plans by as many as 150,000 vehicles.

“Even if we operate our plants at full capacity from December it will be tough to meet the production target, but we will try to achieve that,” Chief Financial Officer Kenta Kon told a news briefing.

After a better-than-expected jump in second-quarter profit, the world’s largest carmaker by volume hiked its full-year operating profit forecast 12% to 2.8 trillion yen ($24.5 billion), which would mark a six-year high.

But Kon said that without the impact of a weaker yen which inflates the value of profits earned abroad, it was “in substance a downward revision” due to higher materials costs.

The annual profit outlook was lower than a Refinitiv consensus estimate of 2.9 trillion yen.

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For the three months to end-September, Toyota reported operating profit of 750 billion yen, a 48% jump over the same period a year earlier and 26% better than market expectations.

It also announced a share buyback of up to 150 billion yen or 0.86% of shares and hiked its first-half dividend by 15 yen to 120 yen.

Although Toyota stuck to the production goal it announced in September, it lowered its full-year sales target by 260,000 vehicles to 10.29 million units.

Toyota’s vehicle sales edged up 0.9% in the second quarter to 1.9 million units, as sales in Asia jumped 24%, while sales decreased in most other markets including Japan, North America and Europe.

In general though, car demand in key markets, such as China, the United States and Europe is rebounding following an earlier pandemic-induced slump, with demand for electric vehicles (EVs) in particular seeing healthy growth.

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Like its peers, Toyota is investing heavily in technology and production capacity to build EVs as countries around the world impose tighter rules to cut carbon emissions.

It has announced plans to have 15 battery electric vehicle models on the market by 2025, and will spend $13.5 billion by 2030 to develop EV batteries and their supply system.

Toyota’s shares ended 0.7% higher after the results.

($1 = 114.1700 yen)

(Reporting by Tim Kelly; Editing by Miyoung Kim and Edwina Gibbs)

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UK firms struggle to find staff, see higher inflation – BoE survey

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December 2, 2021

LONDON (Reuters) – British companies are struggling to find the staff they need and expect higher inflation in the year ahead, according to a survey published on Thursday by the Bank of England which is weighing up whether to raise interest rates this month.

The BoE’s monthly Decision Maker Panel survey showed 85% of respondent firms were finding it harder to recruit new employees compared to normal, with 58% reporting it to be much harder.

The survey also showed year-ahead annual price inflation was expected to be 4.2%, up from 3.9% in the October survey.

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(Writing by William Schomberg, editing by Andy Bruce)

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Sustainable investors look for profits in fuzzy data

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December 2, 2021

By Ross Kerber and Simon Jessop

(Reuters) – Sustainability-focused investors believe a little effort can go a long way toward finding profitable opportunities buried in incomplete corporate environmental or social impact filings.

That is according to several speakers on a panel at  the  Reuters Next conference, who described how they choose sustainable investments and work with executives at a time when there are few standard requirements for how major U.S. and European companies should detail carbon emissions disclosures or workforce demographics.

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Eoin Murray, head of investment at Federated Hermes, said the disparate reports from many companies give portfolio managers the chance to dig deeper.

“As an active manager, there’s a part of me which doesn’t mind that some of the data doesn’t entirely line up, because it means the rewards go to those that do their homework properly and unearth the real gems,” Murray said.

Mary Jane McQuillen, a managing director for ClearBridge Investments, said while some companies are eager to become more sustainable, others are defensive and don’t want to be burdened by yet another topic of investor interest.

A third group, McQuillen said, admits there is much about sustainable reporting they don’t know, and is seeking input from their shareholders.

“They say, ‘we really don’t know what the issues are. If you can help us as an owner, and with your years of experience as an investor in understanding how these issues may apply to my industry, as well as to my particular company, that would be super helpful,” she said.

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U.S. regulators are in the process of developing guidance for how companies should spell out things like emissions, and rules in Europe are just coming into place.

At the U.N. climate change conference in Glasgow, Scotland, in November, global leaders agreed to do more to curb carbon emissions and took other steps toward setting up global carbon markets and an international body to set sustainability reporting standards.

Julie Gorte, senior vice president at Impax Asset Management, said absent complete corporate reporting, investors can still learn a great deal about companies’ environmental, social or governance impact through government filings.

“For companies the watchword is, look, people are going to find out stuff about you, whether you tell them or not. If you want them to know what the truth is, tell them,” Gorte said.

To watch the Reuters Next conference please register here https://reutersevents.com/events/next/

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(Reporting by Ross Kerber and by Simon Jessop; Editing by Sonya Hepinstall)

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Facebook could be sued by consumer groups, EU court adviser says

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December 2, 2021

By Foo Yun Chee

BRUSSELS (Reuters) – Facebook could be sued by consumer groups for privacy violations, an adviser to Europe’s top court said on Thursday, in a German online gaming case that could pave the way for similar action across the EU.

The case started in 2012 and is one of several privacy and antitrust headaches facing Facebook in Europe, where regulators have introduced legislation to curb the power of so-called tech giants and ensure more transparency.

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“Member states may allow consumer protection associations to bring representative actions against infringements of the protection of personal data,” Richard de la Tour, advocate general at the Luxembourg-based Court of Justice of the European Union (CJEU), said in an opinion.

Such actions must be based on infringements of rights derived directly from GDPR, he added, referring to the landmark EU privacy rules adopted three years ago.

“We’ll analyse the Advocate General’s opinion. Legal clarity on scope and process of GDPR is important and we’re glad the Court of Justice of the European Union is considering the questions raised in this case.” said a spokesperson Meta Platforms Inc.

GDPR stipulates that any requests to collect personal data should be subject to clear and informed consent.

De la Tour said consumer bodies that defend the collective interests of consumers are particularly suited to GDPR’s objective of establishing a high level of personal data protection.

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Facebook found itself in the dock after the Federation of German Consumer Organisations filed a lawsuit alleging that the social network had allowed operators of online games to improperly collect the personal data of gamers.

The games were offered on Facebook’s App Center in 2012. By playing the games, users automatically agreed to share personal data including email addresses. At the end of the game, they would receive a message saying that the app could post their status, photos and other information.

A German lower court had ruled in favour of the German federation, leading Facebook to appeal to a higher court, which subsequently sought advice from the CJEU.

Facebook has since revamped its privacy settings.

(Reporting by Foo Yun Chee; Editing by David Goodman)

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