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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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Canada’s Shopify records Black Friday sales up 21%

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November 27, 2021

(Reuters) – Canadian e-commerce company Shopify Inc recorded worldwide sales of nearly $2.9 billion on Black Friday, an increase of about 21% in comparison to last year, the company said Saturday.

New York, London and Los Angeles were among the top-selling cities, the company said, while apparel and accessories was the top-selling product category.

Shopify also said it funded 23,000+ tonnes of carbon removal to counteract emissions from the delivery of every order placed on its platform on Black Friday.

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(Reporting by Aakriti Bhalla in Bengaluru; Editing by Nick Zieminski)

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Xiaomi to open car plant in Beijing with annual output of 300,000 vehicles – Beijing govt

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November 27, 2021

SHANGHAI (Reuters) – Chinese smartphone giant Xiaomi Corp will build a plant that can produce 300,000 vehicles annually in Beijing for its electric vehicle unit, authorities in the capital said on Saturday.

The plant will be constructed in two phases and Xiaomi will also built its auto unit’s headquarters, sales and research offices in the Beijing Economic and Technological Development Zone, the government-backed economic development agency Beijing E-Town said on its official WeChat account.

Beijing E-Town said it anticipated the plant reaching mass production in 2024, a goal announced by Xiaomi’s Chief Executive Lei Jun in October.

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In March, Xiaomi said it would commit to investing $10 billion in a new electric car division over 10 years. The company completed the business registration of its EV unit in late August.

The company has been opening thousands of stores to spur domestic sales growth for its smartphone business but eventually intends to use these shops as a channel for its plans to sell electric vehicles.

(Reporting by Brenda Goh; Editing by William Mallard)

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Eni sells Snam 49.9% stake in Algeria gas pipelines for 385 million euros

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November 27, 2021

MILAN (Reuters) -Italian energy group Eni has agreed to sell gas group Snam 49.9% of its stake in strategic pipelines carrying Algerian gas into Italy for 385 million euros ($436 million), the two companies said on Saturday.

The pipelines will be jointly controlled by the two companies, they said in a joint statement.

Italy imports more than 90% of its overall gas needs and Algerian gas currently accounts for around 30% of flows.

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“This transaction allows us to free up new resources to be used on our energy transition path,” Eni Chief Executive Claudio Descalzi said.

Eni is working on spinning off a series of oil and gas operations into new joint ventures to help reduce debt and fund its shift to low-carbon energy.

Snam, which owns a 20% stake in the TAP pipeline that carries Azeri gas into Italy, makes most of its money from managing Italy’s gas transport grid.

It has pledged to spend more on new green business lines such as hydrogen and, like other gas grid operators in Europe, is upgrading its gas network to be hydrogen ready.

“In the future, North Africa could also become a hub for producing solar energy and green hydrogen,” Snam CEO Marco Alvera said.

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The pipeline companies involved in the deal posted net income of around 90 million euros in 2020.

($1 = 0.8836 euros)

(Reporting by Stephen Jewkes, editing by Giselda Vagnoni)

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