Nissan Motor Co yesterday upgraded its full-year profit forecasts, as the depreciating yen helps inflate its overseas profits, despite ongoing challenges including COVID-19 shutdowns and the global chip shortage.
The company now expects an annual net profit of ¥155 billion (US$1.07 billion), up ¥5 billion from an earlier annual target, through March next year.
Nissan also hiked annual sales figures, but said it now expects to sell 3.7 million units in the business year, down from a previous forecast of 4 million units and lower than its unit sales in the previous fiscal year.
Photo: Bloomberg
In a statement, the company cited “a severe business environment in the first half of the fiscal year, with raw material prices rising sharply and sales volume falling below the previous year’s level due to semiconductor supply shortages and the impact of COVID-related lockdowns in Shanghai.”
It said it improved net revenue per vehicle sold by slashing expenses, but also benefited from the collapsing value of the yen against the US dollar.
“Our strong first half performance reflects our steadily improving profit structure and strong business foundations, as well as the exchange-rate impact of the historically weak yen,” Nissan CEO Makoto Uchida said in a statement.
Photo: AFP
He said the business environment was expected to “remain challenging” in the second half of the fiscal year, with ongoing semiconductor shortages and increased raw material prices.
Nissan also reported a one-time loss in the period of approximately ¥100 billion, which it said is “expected to be incurred in connection with the withdrawal from the Russian market.”
The results came with all eyes on negotiations between Nissan and alliance partner Renault SA on a possible rebalancing of their sometimes fractious relationship.
The French automaker, which on Tuesday confirmed that it would create a new electric vehicle unit called Ampere, is believed to be discussing a sizeable reduction of its stake in Nissan.
Nissan last month said in a statement that “trustful discussions” were under way with Renault as part of an effort to “reinforce the cooperation and the future” of their decades-long alliance.
Uchida yesterday told reporters that “open and constructive” discussions were being held on the future of the alliance, which also groups Mitsubishi Motors Corp, but declined to offer any details.
“Yesterday, the Renault group made an announcement about the new firm... We’re looking into how this firm would benefit Nissan and how we should participate in it,” he said.
“Based on the discussions going forward, we will consider an investment in this new firm,” he added.
Separately, Honda Motor Corp yesterday said its fiscal second-quarter profit rose nearly 14 percent as a weaker yen boosted its overseas earnings, and strong demand boosted sales of its vehicles and motorcycles.
The company reported a July-to-September profit of ¥189.2 billion.
Quarterly sales rose 25 percent, it said.
Honda Group sold nearly 5 million motorcycles in the past quarter, up from 4.2 million motorcycles a year earlier. It sold 970,000 vehicles, up from 917,000.
The maker of the Civic, Accord and Clarity fuel cell models said in a statement that its operations were hurt by a semiconductor shortage that has slammed the global vehicle industry. Rising costs for raw materials also ate into profits.
However, the company was helped by favorable currency fluctuations, price increases, reductions in sales incentives and growth in its motorcycle sales, it said.
Additional reporting by AP
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