UPDATE 2-Japan truck makers post better H1 on sales jump


(Recasts with Nissan Diesel results, other details)

By Chang-Ran Kim, Asia auto correspondent

TOKYO, Nov 20 (Reuters) - Two struggling Japanese truck makers posted significantly improved first-half results on Thursday and forecast better performances helped by restructuring efforts and a recovery in domestic demand.

Isuzu Motors , owned 12 percent by General Motors , returned to the black for the six months to September 30 thanks also to brisk sales in Asia, while Nissan Diesel Motor tripled its operating profit to 11.36 billion yen ($104 million).

But Nissan Diesel more than doubled its net loss to 9.65 billion yen as it booked big special losses, mainly to build up provisions against irrecoverable debt. Its sales grew 23 percent to 226.02 billion yen.

Japan's truck market has long been considered too small for the nation's four makers since it collapsed a decade ago with the bursting of the nation's economic bubble, but the sector has zoomed ahead this year due to the introduction of stricter emission controls.

Isuzu's operating profit was 35.70 billion yen, compared with a loss of 21.35 billion yen in same period last year.

Net profit was 24.92 billion yen, versus a loss of 84.23 billion yen in the same period a year before, when its restructuring costs ballooned on bigger pension liabilities and special losses from early retirement packages. Sales grew 14 percent to 722.92 billion yen.

For the year to next March, Isuzu, renowned for its diesel engine technology, forecast a record net profit of 40 billion yen, following a year-earlier loss of 144.30 billion, with sales seen rising 3.7 percent to 1.4 trillion yen.

"Sales at home and in other regions such as Thailand and China were stronger than we had previously expected," it said in a statement.


Both Isuzu and Nissan Diesel accumulated huge debts during the bubble, and have been trying to rebuild their businesses with the help of creditors and shareholders, banking on the explosive Asian market for growth.

Thanks to the profits scored, Isuzu said its interest-bearing debt decreased by 62.4 billion yen during the six months to 455.4 billion yen, within reach of its target of 450 billion under a three-year turnaround plan ending in March 2005.

Nissan Diesel, meanwhile, reduced its debt by just 13 billion yen to 374.5 billion yen -- roughly equal to its revenues last year. It aims to slash that to 330 billion yen by the end of March and to under 200 billion yen by March 2005.

Nissan Diesel has been battling to stay afloat but was recently given a new lease on life, beginning with a 106 billion yen bailout from banks and majority owner Nissan Motor in September.

Last month, France's Renault SA agreed to return 5.625 percent of Nissan Diesel's shares for free.

For the year to March, Nissan Diesel expects recurring profit to jump 83 percent to 11 billion yen but sees net loss expanding to 44 billion yen from last year's 3.35 billion yen due to special losses including a writedown of retirement allowance obligations.

Japan's two other truck makers have also reported strong results.

Last month, Hino Motors , a unit of Toyota Motor and the nation's healthiest truck maker, posted a 273 percent rise in first-half net profit to 13.95 billion yen as sales jumped 29 percent to 502.34 billion yen.

Unlisted Mitsubishi Fuso Truck & Bus Corp, a spin-off of Mitsubishi Motors , said last week its operating profit rose nearly seven-fold to 13.5 billion yen.

Isuzu's shares spiked up on the news, closing 10 percent higher at 189 yen. Nissan Diesel ended up 5.6 percent at 207 yen before the announcement. The broad TOPIX index ended up two percent.

Isuzu's shares have nearly tripled from 65 yen at the start of the business year while Nissan Diesel's have jumped 80 percent as brisk sales lifted share prices across the sector. ($1=109.16 yen)



Follow Us

Sponsored Introduction Continue on to (or wait seconds) ×