Nissan Eyes Return To Annual Profit After Strong Q1 Results
Tokyo, (UrduPoint / Pakistan Point News - 28th Jul, 2021 ) :Crisis-hit Japanese carmaker Nissan upgraded its annual outlook Wednesday, projecting a return to the black, after a strong first quarter performance fuelled by a recovery from the impact of the coronavirus crisis.
However, the firm warned that while it was upbeat, there were still headwinds while analysts warned a chip shortage could also pose problems and it faced "a crucial year".
But CEO Makoto Uchida hailed a "strong performance in the first three months of our new fiscal year" as the company pursues a restructuring programme.
It also tipped stronger annual sales after its quarterly sales surged 71 percent to 2.0 trillion yen, but Uchida warned uncertainty would persist for the rest of the year.
"We will carefully monitor and manage potential risks as we continue to improve quality of sales and maintain financial discipline," he said, predicting a recovery in the second half, driven by the release of new models in core markets.
Uchida told shareholders in June: "Our businesses are on a recovery path. We are working to avoid a net loss." But while Nissan could still return to the black in the current fiscal year, analysts say the global chip shortage could cloud its outlook.
Supply disruptions have compounded the mismatch between demand for and availability of chips, a key component in modern cars.
- 'Crucial year' - "If Nissan can steadily reduce costs, sell new models well and subdue the impact of the semiconductor shortage, profitability could be in sight," said Satoru Takada, an auto analyst at Tokyo-based research and consulting firm TIW. "Nissan is facing a crucial year," he added.
Analysts are also focusing on the recent shift to electric vehicles among leading automakers owing to growing concerns over emissions.
Nissan has recovered from the effects of the pandemic more slowly than its rivals.
Even before the global crisis, the firm was struggling with increasing sales costs and the ongoing saga surrounding its former chief Ghosn.
Shares of Nissan have jumped more than 40 percent over the past 12 months and closed up 3.88 percent on Wednesday ahead of the earnings announcement.