Nissan operating profits down 14%

Employees assemble VQ engines at Nissan's Iwaki plant in Iwaki city. Photograph: Haruyoshi Yamaguchi/Bloomberg

Nissan forecast a better-than-expected 14.4 per cent fall in annual operating profit today, defying a quake-induced setback in the past few months and projecting another year of record sales.

Japan's second biggest carmaker forecast an operating profit of 460 billion yen ($5.73 billion) for the year to March 2012.

It expects net profit of 270 billion yen, down 15.4 per cent from last year, assuming an average dollar rate of 80 yen and euro of 115 yen. Revenue is seen rising 7.1 per cent to 9.4 trillion yen.

Nissan chief executive Carlos Ghosn had flagged a positive surprise for sales a day earlier, saying the numbers would call for "significantly higher" volumes this year.

Speaking yesterday Mr Ghosn had also said Nissan was "very near" normal production levels after the March 11th earthquake and tsunami disrupted the industry's supply chain on an unprecedented scale.

Before the forecasts, Nissan's shares ended up 1.3 per cent, taking a cue from Mr Ghosn's bullish comments yesterday.

Nissan has been charging ahead in China and has been laying the groundwork for industry-beating growth in other emerging markets such as India and Russia. Plans to accelerate growth in Brazil are also in the pipeline and will be announced soon, Mr Ghosn said yesterday.

Nissan's operating profit exceeds the guidance provided by domestic rivals Toyota and Honda, which expect 300 billion yen and 200 billion yen, respectively. Toyota and Honda, unlike Nissan, report under US accounting standards, meaning their profits made in China are excluded from the operating line.

For the 2011/12 business year, Nissan expects sales to rise 9.9 per cent to 4.60 million vehicles, and for production to rise 11.2 per cent to 4.613 million vehicles.

By region, Nissan sees sales in China, its biggest market, rising 12.3 per cent to 1.150 million vehicles, and growing 7.7 per cent in the United States to 1.04 million vehicles.

In Europe, it expects growth of 10.4 per cent to 670,000 cars, while sales in Japan are seen rising 1.7 per cent to 610,000.

Mr Ghosn, also chief executive of Nissan partner Renault, is scheduled to outline a roadmap for the next six years at Nissan on Monday.

Earlier, Japanese carmaker Suzuki also unveiled consensus-beating forecasts, sending its shares up 3.1 per cent by the close.

Reuters 

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