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Nissan warns profit growth set to stall
[TOKYO] Nissan warned Thursday that profit growth would stall this year after its latest annual net profit rose more than a quarter to US$5.82 billion, largely due to the sale of its stake in an auto parts supplier.
The downbeat forecast comes a day after Japanese rival Toyota posted its first drop in annual net profit for five years, as a forecasted pick-up in the yen and pricey customer incentives in the US market dent its bottom line.
Altima sedan maker Nissan posted a net profit of 663.5 billion yen (S$8.21 billion) in the fiscal year to March, up nearly 27 per cent from a year earlier.
The jump was driven by gains from the sale of its non-controlling ownership stake in Calsonic Kansei, which makes vehicle interiors, climate control systems, compressors, exhaust systems and electronics.
Also Thursday, Nissan said its latest operating profit fell 6.4 per cent while revenue edged down 3.9 per cent to 11.72 trillion yen, blaming on a stronger yen.
For the current year to March 2018, Nissan said net profit would fall 19.4 per cent to 535 billion yen. Operating profit and revenue are on track to decline 7.7 per cent and 0.7 per cent, respectively, it said.
Nissan sold more cars globally in the latest period - 5.63 million - with a rise in most major markets including North America, Europe and China. Sales in its home market were down.
In February, longtime Nissan boss Carlos Ghosn announced he was stepping down from the chief executive post to focus on overhauling scandal-hit Mitsubishi Motors, but would remain chairman.
Mr Ghosn, who also heads up French automaker Renault, handed over the reins to Nissan veteran Hiroto Saikawa in April.
"Nissan is seeing a strong performance in North America and China, the world's two major markets," Satoru Takada, an analyst at TIW, said before the earnings report.
"I don't think Mr Ghosn's retreat will have a big impact as he is still overseeing the company as its chairman," Mr Takada told AFP.
Among a handful of foreign-born CEOs at Japanese firms, Mr Ghosn earned the nickname Le Cost Killer for his aggressive restructuring at Renault and later the nearly-bankrupt Nissan in the late nineties.
He appointed Saikawa as his co-CEO last year in order to focus on Mitsubishi's turnaround.
Mr Ghosn took charge at troubled Mitsubishi after Nissan threw it a lifeline in May last year, buying a one-third stake for about US$2.2 billion as it wrestled with a mileage-cheating scandal that hammered sales.
Two of the affected models were being made for Nissan, which was the first to uncover problems with the fuel economy data.