Nissan Motor Co. announced improved financial results Tuesday for the first half of its fiscal year, which ended Sept. 30, 2021, while revising its full-year profit outlook for the remaining six months of fiscal year 2021.
The company reported net revenue of $34.9 billion, or 3.95 trillion yen, and operating profit of $1.2 billion, or 139.1 billion. Revenue rose 21.6% from the first half of fiscal year 2020, when the company reported revenue of 3.1 trillion yen. Profit margins improved markedly to 3.5% from -5.1% for the same period in 2020.
For the Yokohama company’s second quarter, net revenue was 1.94 trillion yen, with a net profit of 54.1 billion yen and 3.3% operating margin. But market share declined from 6.8% in the first quarter to 5.8% in the second quarter as sales slid to 198,955 units from 298,148.
Still, Q2 results were 0.2% above its Q2 2020 performance. Despite the 10% decline in volume, it was less than the overall industry’s 12% decline in worldwide volume, and the U.S. market’s 13% decline in volume.
Improved results in the U.S.
In the U.S., the company credited market share gains for its improving health, with the Nissan Frontier gaining 5.3 points of U.S. market share, now accounting for a 9.9% share in its segment vs Q2 2020, while the Nissan Pathfinder saw its share rise 1.7 points to 4.7% of its segment. The Rogue’s share grew 2.3 points to 7.8%, while Sentra’s share rose 1.8 points to 11.1 percent.
“Our strong results are the outcome of diligent financial management, improved quality of sales and continuing product offensive. This has helped us withstand several headwinds,” said Nissan CEO Makoto Uchida, in a statement.
While the company stated that while sales were lower than expected due to the semiconductor supply shortage, selling expenses and fixed costs decreased. The company’s break-even sales volume declined 15%, while the quality of sales improved, leading to higher profits per unit.
Shortages still playing a role
But supply shortages are still affecting the company’s outlook despite the improving revenue picture.
Nissan expects to produce 3.8 million units during the next six months, a 13.6% decrease from prior forecasts. But the improving quality of sales should help the company maintain its newfound profitability.
For the full fiscal year, Nissan is forecasting net revenue of 8.8 trillion yen, and an operating profit of 180 billion yen, 30 billion yen more than previous company forecasts. The company expects a net profit of 180 billion yen, 120 billion yen more than the previous outlook.
“We are confident to exceed 2% operating margin for the year,” Uchida said.