Toyota warns profit to skid by 20%

STORY: Toyota said on Wednesday (May 11) that "unprecedented" hikes in the cost of materials could slice a fifth off its full-year profit.

The world's top automaker by sales said it can no longer shrug off the supply-chain crunch that has roiled the global industry.

Its fourth-quarter operating profit also reported a 33% drop - well below analyst estimates.

The news lead to shares closing down more than 4%, Wednesday, after their biggest one-day fall in two months.

Toyota's chief financial officer, Kenta Kon, told a news conference that material costs will more than double to over $11 billion this fiscal year.

The company aims to switch to lower-cost alternatives.

The automaker had fared okay during the earlier months of a global semiconductor shortage, thanks to a healthy stockpile.

But it's now joining rivals in slashing production due to the crunch, and China's strict lockdowns which have affected production.

Toyota plans to increase its global sales this year - but the rising costs could put pressure on its profitability.

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