Nissan Reports Cost Cutting Worked-Posts record 1H Profit

TOKYO, Nov 19 Reuters reported that Nissan Motor Co said on Monday it posted a record net and operating profit in the first half of the current business year, boosted by aggressive cost-cutting efforts and favourable currency rates.

In line with preliminary numbers announced in October, the automaker said consolidated operating profit for the April-September period climbed 41 percent to 188.78 billion yen ($1.54 billion) from the previous year.

Net profit jumped 34 percent to 230.30 billion yen with earnings per share at 57.95 yen compared with 43.45 yen a year earlier.

The biggest factor boosting operating profit was a 101 billion yen reduction in the cost of purchasing parts, Nissan said. After that, the weaker yen contributed 68 billion yen, offsetting a 61 billion yen decline in vehicle sales.

Nissan, which is 37 percent owned by France's Renault SA and in the second year of a drastic three-year restructuring plan, also kept its full-year forecast of a 21 percent rise to 350 billion yen in operating profit.

Net profit was seen mostly stable at 330 billion yen, a decline of 0.3 percent compared with the previous year.

Net income probably won't match the expected rise in operating profit largely due to a slowdown in asset sales compared with a year earlier, analysts said.

Last month, Chief Executive Carlos Ghosn said the company would have revised its forecasts upwards but for market uncertainty following the September 11 attacks in the United States.

In the first half, sales came to 2.977 trillion yen, down 1.4 percent from the previous year with the automaker hampered by a lack of new models.

Nissan expects its global vehicle sales in the full year to next March to fall 2.3 percent to 2.57 million units.

After two years of concentrating on its cost-cutting drive, it has targeted the next business year for a big push into volume growth with the launch of 13 new models planned.

Analysts said they expect to see continued earnings growth for the restructuring automaker in the next business year, even after factoring in a likely tough U.S. market in the wake of the September 11 attacks.

``I think Nissan will post higher earnings growth next year when we start to see serious volumes from new products,'' said Clive Wiggins, auto analyst at Commerz Securities.

``Importantly, that...will be less expensive to produce as synergies with Renault kick in.''

Nissan shares were one of the biggest gainers among automakers on Monday as investors returned to the sector, prompted in part by a weakening of the yen against the dollar.

Its stock climbed 5.89 percent or 33 yen to close at 593 yen. Other Japanese automakers also saw rises of between four and seven percent.