Standard & Poor's said on May 14 that it would maintain its current outlook on Toyota after threatening a downgrade in February at the height of the firm's recall crisis. It maintained its "AA" rating on the carmaker, the third highest on a scale of 22, meaning the company is considered to have an extremely strong capacity to repay its borrowings, and removed a "credit watch" warning.
"Toyota Motor recovered its very strong liquidity position during the past fiscal year and continues to maintain a minimal financial risk profile," the agency said. Toyota "is likely to continue managing its quality related issues while maintaining a recovery trend in its operating performance."
In February Standard & Poor's said safety concerns were putting the auto giant's brand image and sales at risk, and might force a downgrade.
Ratings agency Moody's in April downgraded the carmaker, saying uncertainty over product quality following mass recalls raised questions over its profitability.
Toyota said this week it had returned to the black in the fiscal year ended March and forecast surging profits despite recalling around 10 million vehicles over safety issues blamed for 58 deaths in the United States.
The world's largest automaker reported an annual profit of 209.4 billion yen (US$2.2 billion) and said it expected the figure to soar 48% in the current year, despite pulling around 10 million vehicles on safety grounds.
It posted a net profit of 112.2 billion yen in the three months ended March, the height of the recall crisis, after recording a loss of 765.8 billion in the same period a year earlier. Recall-related costs would be around 180 billion yen, it said.
Toyota still faces looming litigation that could potentially involve massive fines, while U.S. regulators are questioning why a Japanese recall of Hilux trucks in 2004 was not extended to the United States until a year later.
U.S. transport secretary Ray LaHood also refused to rule out the possibility of the automaker being hit with another fine after it agreed to pay a record $16.4 million in April to settle claims that it hid defects.
Copyright Agence France-Presse, 2010