Nissan half-year profit jumps 15%

TOKYO: Nissan Motor Co reported yesterday a 15% increase in half-year operating profit, as a slew of new models drove sales higher in every major car market. 

Japan's third largest vehicle maker, owned 44% by France’s Renault, consequently kept unchanged its full-year forecast – which calls for an 11% jump in operating profit – despite a seven yen drop in the US dollar rate in the past month to around 109 yen. 

Nissan said it was now assuming a dollar rate of 114 yen for the full business year and 110 yen for the second half. It had previously based its forecasts on a dollar rate of 120 yen for the full year. 

Armed with racy new models like the Quest minivan and Teana sedan, Nissan, along with Japanese rivals Toyota Motor and Honda Motor, has been expanding its share of the key US and European markets despite little or no growth in those regions. 

Nissan’s group operating profit for the six months to September came to a preliminary 401 billion yen (US$3.66bil), up from 348.30 billion a year ago. 

Its net profit for the half, however, fell 17% to 237.7 billion yen, as it had a lower effective tax rate and posted big special gains mainly on asset sales in the year-ago period. The company said that without these factors net profit would have mirrored the rise in operating income. 

Revenue grew 8.2% to 3.56 trillion yen while global sales volume climbed 5.9% to 1.47 million units.  

Nissan's operating margin was 11.3% for the half-year, the highest in the industry among high-volume vehicle makers. 

“We have been faced with adversities on many fronts – from lower industry volumes and record levels of incentives to fluctuating exchange rates and uncertainty in global markets,” chief executive Carlos Ghosn said in a statement. “Even so, Nissan is again reporting record operating profits.” 

Nissan's robust preliminary results came just a day after US giant General Motors Corp reported a 91% plunge in its global automotive business earnings for the third quarter, hit by a drop in production and huge spending on buyer incentives on its home turf. 

Nissan is due to announce official results on Nov 6, but little change is expected from the preliminary figures. – Reuters  

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