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Japan’s Nidec Posts 8% Rise in Q2 Profit, Sticks to Full-Year Outlook

Japanese electric motor maker Nidec 6594.T posted a 7.6% rise in quarterly operating profit on Monday, helped by stronger sales and a weaker yen currency and it stuck to its full-year outlook.

Operating profit totalled 55.6 billion yen ($371 million), compared to 51.7 billion yen in the same period a year earlier. That was largely in line with a 57.83 billion yen average profit in a survey of six analysts by LSEG.

The Kyoto-based firm stuck to its full-year forecast for an operating profit of 220 billion yen for the year to end-March, more than double the previous year’s result.

Nidec has invested heavily in developing and manufacturing an e-axle traction motor that combines an electric vehicle’s gear, motor and power-control electronics, hoping to tap opportunities for growth in China and parts of Europe.

Yet China is an increasingly competitive, and difficult market for foreign players.

Sales of the EVs that Nidec supplies to in China jumped in September due to gains in models of Aion, the EV brand of Guangzhou Automobile Group 601238.SS, analysts at Jefferies wrote in a research note ahead of the earnings release.

“We are cautious given Nidec’s potential share loss within popular EV models,” they wrote. “We also highlight the EU’s probe into low-priced Chinese EV imports, which commenced on 4 October.”

Nidec said the yen depreciated more than expected against both the U.S. dollar and the euro, resulting in a foreign currency gain of approximately 26 billion yen for the first half of the financial year.

($1 = 149.9300 yen)

Source : Nasdaq