1. ITV Report

Nissan reports 70% drop in quarterly profits

Nissan has announced a fall in profits. Credit: PA Images

Nissan has announced that its latest quarterly profit figures are 70% down on last year.

In a statement to investors today, the motor manufacturer said that it made a profit of 30bn yen (£214m).

The figure for the same period last year was 101.2bn yen (£721.8m).

Nissan has altered its full-year profits forecast to 150bn yen (£1.7bn). If this proves correct, it will be the Japanese giant's worst result in 11 years.

Nissan said there were several factors explaining these results, including currency fluctuations, the increased cost of raw materials and a drop in sales.

A Nissan spokesperson said:

Major factors in the decrease were external, such as exchange rate fluctuations, regulatory compliance expenses, and increased raw material costs, combined with increased quality-related costs.

Although decreased vehicle sales volume had a large effect on first-quarter profitability, in the second quarter the decline was offset by decreases in selling expenses, thereby resulting in a positive contribution to profit.

One pillar of Nissan’s business transformation plan is the recovery of U.S. operations, where benefits are starting to be seen from efforts to improve quality of sales. For the second quarter, operating profit for North America3 was close to the previous year’s level.

– Nissan

Nissan employs 7,000 people at its factory in Sunderland, which opened in 1986.

Earlier this year, the firm said it would axe 12,500 jobs worldwide but the Wearside plant was not thought to be directly affected by this.