TOKYO (Oct 29): Japan's Denso, a major auto parts supplier to Toyota, reported an 18% fall in second-quarter operating profit on Thursday, as higher parts and material costs and investments weighed on results.

The auto parts supplier, which generates more than half of its revenue from Toyota group companies, kept its full-year operating profit forecast of 500 billion yen (US$3.2 billion) for the year through March 2027.

Operating profit for the July-September quarter was 86 billion yen, compared with 104.2 billion yen a year earlier and a median forecast of 104.8 billion yen in a poll of nine analysts surveyed by LSEG.

Operating profit in the Asian region decline by more than a third over the six-month period through September, as Denso faced falling vehicle sales in China and higher material costs.

Denso CFO Seiji Maeda told reporters higher memory and aluminium costs contributed heavily to the rise in parts and material costs.

Denso shares fluctuated sharply following the release, last trading up 2.3% compared with a 0.3% gain in the main Nikkei 225 index.

The company said in a statement that it would buy back up to 3.99% of its own shares worth 200 billion yen.

Uploaded by Liza Shireen Koshy