Toyota is buying back stock for the first time since 2009

Posted Mar 26, 2014

Toyota Motor Corporation is going to buy back stock for the first time in five years because its cash pile and profits are climbing. Toyota is going to buy back as many as 60 million shares, which is equivalent to around 1.9% of the company. The 60 million shares would be worth round 360 billion yen ($3.5 billion). Toyota last bought stock back in February 2009. About half of those shares will be retired by the end of June. Toyota forecasted a record 1.9 trillion yen profit for the year ending March 31st.

The buyback announcement is taking place around the same time that Toyota president Akio Toyoda started the Toyota Mobility Foundation, which supports global nonprofits and the work on improving transportation systems in developing markets.

Toyota is going to sell 30 million of its shares to the foundation at a discounted price of 1 yen each so that the charity can use the stock to fund activities in the future. Toyota will provide around 3-4.5 billion yen to the foundation every year. This plan is pending approval from shareholders at the annual general meeting in June. Toyota is aiming to pay 30% of net income as dividends and the company will not be building any new factories until at least 2015. The company will be focusing on improving efficiency at existing plants first.

Earlier this month, Toyota agreed to pay $1.2 billion to end a U.S. criminal probe after the Justice Department said that the company intentionally hid information and misled the public after safety issues in its vehicles. Toyota is now outselling all other automakers and is targeting 10 million deliveries this year.

Toyota’s cash, cash equivalents, and short-term investments climbed to 3.57 trillion yen.

[Source: Bloomberg]