TOKYO - Nissan Motor, Japan`s second-largest carmaker controlled by Renault of France, reported Monday a fifth consecutive record annual profit on the back of strong sales in the key US market.
It said net profit rose 1.7 percent to 512.3 billion yen (4.76 billion dollars) in the year to March, just above its own forecast, while operating profit was up 4.4 percent to 861.2 billion yen, another record.
Revenue rose 15.4 percent to 8.58 trillion yen as the company sold a record 3.39 million vehicles globally, propelled by a 18.4 percent rise in US sales that topped the one million mark for the first time.
"Nissan rose to the challenges and delivered a record performance despite many headwinds, such as unfavourable exchange rates, higher commodity prices, higher incentives and higher interest rates," chief executive officer and outgoing president Carlos Ghosn told a news conference.
In the past year, currency fluctuations trimmed operating profit by 78 billion yen while sales costs rose 114 billion yen, Nissan said.
For the year to March 2006, the company forecast higher earnings with net profit put at 517 billion yen and operating profit at 870 billion yen on sales of nine trillion yen.
"The fundamentals of the business are strong, our products are attractive to consumers and Nissan is poised for sustained, profitable growth," Ghosn said.
The company sees higher energy and commodities prices, and uncertainty over US and Japanese market growth as risk factors for the current year. A global squeeze on steel supplies forced Nissan to suspend operations at three of its four domestic factories for five days late last year.
"2005 is a year with a very high level of uncertainty and, for the first time, many more risks than opportunities," Ghosn said without elaborating.
Asked about the impact of protests in China and South Korea against Japan`s wartime record on Nissan`s sales, Ghosn said: "I personally don`t think that the recent events that took place in China are long-time problems."
On Friday, Ghosn, who has become an icon in Japan and beyond for the transformation he has wrought at Nissan, takes over the reins at Renault, ceding day-to-day control, although he will remain CEO and a towering influence.
In 1999 he was brought in by Renault to save Nissan which was then struggling to stay afloat as it lost market share and was sinking under a mountain of debt put at 2.1 trillion yen.
Ghosn on Monday also unveiled details of the carmaker`s new three-year business plan under the name `NISSAN Value-Up.`
It calls for Nissan to maintain the top level of operating profit margin among global automakers -- currently at 10 percent -- in each of the three years.
Nissan also aims to achieve global sales of 4.2 million units by the year to March 2009 with a 20 percent return on invested capital on average, excluding cash on hand, over the three-year period.
The company will launch the Infiniti model as a "global tier-one luxury branch", seeking new markets in South Korea, China and Russia in addition to existing markets in North America, Taiwan and the Middle East.
But Ghosn said Nissan would postpone the launch of Infiniti in Japan, which was scheduled in 2007, until the end of the three-year plan because "it will take some time to improve our distribution network."
In the US market, truck sales jumped 47.6 percent in the past fiscal year, boosted by new Frontier and Pathfinder models.
Nissan`s sales in Japan rose 1.4 percent to 848,000 units while in Europe, where numbers are compiled on a calendar year basis, sales were flat at 544,000 in 2004.
Sales in "general overseas markets", including China, Mexico and Canada, rose 19.5 percent to 983,000.
Nissan shares closed down 12 yen or 1.15 percent at 1,036 yen on the Tokyo Stock Exchange while the benchmark Nikkei-225 index rose 0.25 percent. The results were released after the close.
04/25/2005 09:35 GMT