Carmaker Nissan, which has a huge plant at Sunderland, is back in profit after battling Covid and soaring material costs.

The company has reported an operating profit of £1.5bn, with annual sales up 7% to 8.4 trillion yen (about £52bn).

In its report, the company said the business environment was 'extremely challenging', affected by external factors such as the prolonged spread of the coronavirus, semiconductor supply shortages, and high raw material prices.

Despite the challenges, Nissan has continued to make steady progress with its Nissan NEXT transformation plan by strengthening its business foundation, improving quality of sales, and bringing new models to market.

The report went on: "Profitability improved significantly year on year due to continued financial discipline and strict control of fixed costs. The improvement in the quality of sales globally supported by favorable market conditions in the US, led to a significant increase in net revenue per unit of major new models contributing to improved profitability for the period.

Read more: Nissan is a Green Hero for £1bn Sunderland plans

Looking ahead, Nissan expects the market environment to be more severe than in fiscal year 2021 due to ongoing semiconductor supply shortages, higher raw material prices and logistics costs, the crisis in Ukraine as well as the impact of lockdowns on parts supplies in China.

But it aims to maintain an operating profit at the same level,  ensuring the momentum of products, improving quality of sales, and further its control of fixed costs.

Commenting on the results, Nissan president and CEO Makoto Uchida said: “Fiscal year 2022 will be an important year as we move toward fiscal year 2023, the final year of Nissan NEXT. Although we expect the business environment to become even more challenging, we are confident to achieve our transformation plan and ensure Nissan remains a truly healthy and resilient company that in any business environment can be financially stable and profitable, and can maintain sustainable growth. We will reassure the plan’s target of a 5% operating margin3 in fiscal year 2023.”

 

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