Isuzu Trucks Move To Profit in First Hals of 2003

TOKYO, Nov 20, 2003; Reuters reported that Japanese truck maker Isuzu Motors Ltd posted a return to profit for the past half year on Thursday and lifted its full-year forecasts citing cost cuts, a recovery in domestic demand and strong sales in Asia.

Group operating profit for the six months ended September 30 was 35.70 billion yen ($327 million), compared with a loss of 21.35 billion yen in the year-earlier period.

Net profit was 24.92 billion yen, versus a loss of 84.23 billion yen a year before, when restructuring costs ballooned on bigger pension liabilities and special losses from early retirement packages.

For the year to next March, Isuzu, renowned for its diesel engine technology, forecast a record net profit of 40 billion yen, following a year-earlier loss of 144.30 billion, with sales seen rising 3.7 percent to 1.4 trillion yen.

"Sales at home and in other regions such as Thailand and China were stronger than we had previously expected," Isuzu, owned 12 percent by General Motors Corp, said in a statement.

Although Japanese truck demand is only a fraction of the levels seen during the economic bubble a decade ago, sales have been lifted significantly this year by the introduction of stricter emission controls.

Isuzu, which accumulated huge debts during the bubble, has been trying to rebuild itself with the help of GM and creditors, banking on the explosive Asian market for growth.

Thanks to the profits scored, its interest-bearing debts decreased by 62.4 billion yen during the six months to 455.4 billion yen, within reach of its target of 450 billion under a three-year turnaround plan ending in March 2005, it said.

Last month, Hino Motors Ltd, a unit of Toyota Motor Corp and Japan's healthiest truck maker, posted a 273 percent rise in interim net profit as sales jumped 29 percent.

Cash-strapped Nissan Diesel Motor Co is also due to post robust half-year sales growth when it announces earnings at 3 p.m., although it forecast last week a loss of 9.6 billion yen at the net level, more than double last year's.

Isuzu's shares spiked up on the news, trading 11 percent higher at 190 yen, compared with around 177 yen before the announcement.