TOKYO – Nissan Motor Co., a Japanese automaker whose fortunes have improved since striking an alliance with Renault SA of France, reported Monday a 34 percent rise in profits for its first fiscal half as cost cutting and a weaker yen helped offset lagging sales.
Nissan said the first-half results marked the third consecutive half-year of record profits as well as the company's best financial performance in more than a decade.
Nissan earned 230.3 billion yen ($1.9 billion), for the six months ended in September, up from 172 billion yen a year ago.
Sales totaled 2.98 trillion yen ($24.3 billion), down 1.4 percent from 3.02 trillion yen last year. The number of vehicles sold fell 4 percent.
The results were in line with a report given last month by chief executive Carlos Ghosn on the progress of his revival plan, which includes shuttering three assembly plants, cutting purchase costs by turning to global suppliers and selling subsidiaries.
Sent by Renault to fix money-losing Nissan two years ago, Ghosn has become a bit of a star recently for corporate Japan during these hard times while many companies are fighting a serious downturn.
Nissan lost money in seven out of eight years before Ghosn arrived.
``The results were made possible through the swift and strong implementation of the Nissan Revival Plan,'' the Tokyo automaker said in a statement.
Nissan is building a $930 million facility near Canton, Miss., in the United States that is set to open in 2003 and eventually employ 4,000 people to produce a pickup truck, minivan and sport utility vehicle.
The challenge for Nissan is to build a stronger brand image and sell more cars especially in Japan, where rivals Toyota Motor Corp. and Honda Motor Co. dominate with a succession of hit models. Analysts say success will depend on whether Nissan has any hits among the new models planned for next year and ahead.
Nissan kept its profit outlook for the full fiscal year ending in March unchanged at 330 billion yen ($2.7 billion). Its sales outlook was also the same at 6.3 trillion yen ($51 billion) as uncertainties remain about the global economy after the Sept. 11 terrorist attacks in the United States.
For the fiscal year ending in March 2001, Nissan earned 331 billion yen ($2.7 billion) on sales of 6 trillion yen ($49 billion).
For the first fiscal half that just ended, global sales totaled 1.29 million vehicles, down nearly 4 percent from 1.34 million a year ago.
But a weak yen, which boosts the value of Nissan's overseas earnings when converted into the Japanese currency, offset some of those losses, Nissan said. Nissan was calculating earnings at 114 yen to the U.S. dollar, but the greenback is recently trading at about 120 yen.
Nissan and Renault are trying to strengthen their alliance. Last month, Nissan said it will acquire a 15 percent stake in Renault, while Renault raises its stake in Nissan to 44.4 percent the 36.8 percent. Renault acquired its initial Nissan stake in 1999.
In Tokyo trading, Nissan's shares closed up 6 percent Monday at 593 yen ($4.80).
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