Nissan forecasts flat profit on rising costs, parts shortages
TOKYO (Reuters) -Nissan Motor Co on Thursday forecast flat operating profit in its current financial year, significantly below analysts’ forecasts, as the company faces tougher trading conditions caused by a global chip shortage, rising material costs and China’s COVID restrictions.
Nissan joins a growing list of global companies warning about worsening profitability as they cannot fully pass on soaring input costs to consumers and are bracing for more supply chain hold-ups following the Ukraine conflict and prolonged COVID lockdowns in China.
Its bigger rival, Toyota Motor, said on Wednesday “unprecedented” hikes in raw material costs could slice a fifth off full-year profit.
Nissan expects sales to rise by 18.7% in the current financial year that began in April to 10 trillion yen ($77.6 billion). But operating profit would grow just 1% to 250 billion yen, below the 318.5 billion yen mean estimate from 19 analysts polled by Refinitiv.
Japan’s third-largest car maker swung to an operating profit of 56 billion yen in the fourth quarter, helped by cost cuts and a sliding yen, versus a 19 billion yen loss in the same period a year earlier.
The result was better than an average 38.3 billion yen profit forecast from eight analysts polled by Refinitiv.
Nissan said previously the world semiconductor shortage caused its global production to fall for a fourth consecutive business year, with the latest decline being 11% drop year on year.
($1 = 129.2600 yen)
(Reporting by Satoshi Sugiyama Editing by Christopher Cushing, Mark Potter and Jane Merriman)