Nissan profits slide 42.8% in Q1

Nissan profits slide 42.8% in Q1
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First Published: Fri, Aug 01 2008. 01 17 PM IST
Updated: Fri, Aug 01 2008. 01 17 PM IST
AFP
Tokyo: Nissan Motor Co. registered a fall in net profit by 42.8% in the fiscal first quarter, hit by a stronger yen, high raw material costs and slowing global economy.
Japan’s number three automaker said its net profit fell to $489 million in the three months to June from $92.31 billion a year earlier, a company statement said.
Operating profit slid 46.1% to 79.95 billion yen as revenue slipped 4.1% to 2.35 trillion yen. “In the face of severe operating environment, Nissan remains resilient but cautious on the outlook for our industry,” Nissan chief executive Carlos Ghosn said in the earnings statement. Nissan said its bottomline was also hit by provisions related to leased vehicles in North America.
Sales up 6.9% in Apri-June period
Nissan, which was overtaken by Honda in 2006 in terms of sales as Japan’s second automaker, said it had sold 936,000 vehicles in the three months to June, up 6.9% from the previous year.
“Despite rising sales, revenue went down due to foreign exchange losses,” Nissan corporate vice president Joji Tagawa told reporters. A stronger yen reduces the value of Japanese companies’ repatriated earnings.
For the full fiscal year to next March, Nissan maintained its forecast for a 29.5 drop in net profit to 340 billion yen and a 30.5% decline in operating profit to 550 billion, on revenue of 10.35 trillion.
Sales within Japan have dipped
With Japan’s population greying and shrinking, and a credit crunch undermining US sales, Japanese automakers are relying increasingly on emerging economies such as Brazil, Russia, India and China to grow their sales.
Nissan said that it was taking steps to try to reduce the impact of cooling US demand and high steel costs, raising its prices in the United States and revamping its production operations there. “We have identified the major risks and taken actions to address them, particularly in the US market,” said Ghosn.
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First Published: Fri, Aug 01 2008. 01 17 PM IST
More Topics: Japan | auto | Nissan | Honda | Carlos Ghosn |