Japan’s Nidec electric motor maker jumps to record Q2

By Satoshi Sugiyama

TOKYO (Reuters) -Japanese electric motor maker Nidec Corp on Monday posted record second-quarter operating profits after it passed on higher prices to customers, reduced costs and benefited from a weaker yen.

The Kyoto-based company reported 51.71 billion yen ($347.21 million) in operating profit for the three months through September, just short of a 52.3 billion yen average of five analyst estimates, according to Refinitiv data, and 16% higher than the 44.59 billion yen earned a year ago.

Following management turmoil, founder Shigenobu Nagamori returned to the role of chief executive in April after demoting Jun Seki, a former Nissan Motor Co Ltd executive he hired to lead the company, due to disappointing earnings and share performance.

“The results this time were not to my satisfaction yet, but the business performance is already on the way to recovery,” Nagamori said, blaming past executives during the last two years or so for creating a “negative legacy” and changes in corporate culture that led to worse performance and leaks of internal information.

“As for the issue of successors, I regret that I have delayed the process by 10 years,” he said. “In the end, we searched for various candidates from outside the company, but I feel that was the biggest mistake I made in 50 years of running the company.”

Nidec’s shares dipped 2.9% during the second quarter and have dropped 41.1% this year so far. They finished trading in Tokyo up 2.9% on Monday before the results were announced, outperforming the Nikkei 225 stock price average, which was up 0.3%.

NEXT PRESIDENT TO BE CHOSEN IN 2024

Seki, who also held the role of president, left Nidec last month and the company plans to choose the next president from among company insiders in the spring of 2024.

Nidec’s automotive products unit, which had been led by Seki, has been under pressure this year as a result of COVID-19 lockdowns, a global chip shortage and high restructuring expenses and development costs.

The unit booked a profit of 5.5 billion yen in the second quarter as a weak yen and cost reduction in “e-axle” electric car motors spurred a recovery from a 32 million yen loss in the second quarter.

Nidec predicted it would produce 1.2 million units of “e-axle” traction motors in financial year 2023, more than double the number planned in this business year, in response to soaring demand mainly in China, executive Kazuya Hayafune said.

Following heavy investment in development, Hayafune said the company would be able to make the traction motor business profitable by the financial year 2023.

The company kept its full-year operating profit forecast of 210 billion yen for the year ending March 31, compared with the 211 billion yen average of 21 analyst forecasts.

Separately, Nidec said it filed a lawsuit on Monday against Toyo Keizai magazine for libel.

In a statement, it refuted the magazine’s report alleging the company may have engaged in inappropriate handling of share buybacks, saying it was suing the publisher, editor-in-chief of Toyo Keizai online, a reporter and an author for damages, a retraction and an apology.

A Toyo Keizai spokesperson told Reuters the publication stood by its story.

Nagamori is Nidec’s top shareholder with an 8.3% stake, according to Refinitiv data.

($1 = 148.9300 yen)

(Reporting by Satoshi Sugiyama; Editing by Chang-Ran Kim, Christopher Cushing and Barbara Lewis)

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