YOKOHAMA, Japan, May 13 (Reuters) - Nissan forecast more than $1 billion in profit for its fiscal year on Wednesday, predicting a relatively modest hit from the Iran war and an increasing impact from cost-cutting.
The conflict was likely to hurt this year's operating profit forecast of 200 billion yen ($1.27 billion) by less than 15 billion yen, Nissan said, adding that the estimate only covered the first half of the current business year.
Nissan CEO Ivan Espinosa told reporters that the Japanese carmaker
can ship a "good amount" of volume to the Middle East, despite the bottlenecks the war has caused to transport flows.
"We found routes to deliver product," Espinosa said, adding that Nissan expected a sales reduction of around 19,000 vehicles in the first half of its business year due to the conflict.
The hit is far less than that flagged by Toyota, the world's largest automaker, which said last week the effects of the Iran war would cost it about $4.3 billion this financial year.
Nissan expects purchasing-related cost-cutting measures and steps in manufacturing to provide a solid boost to this year's profit, while raw material prices are likely to be a drag.
The bigger risk Nissan, Toyota and other Japanese automakers face from the conflict comes from the wider impact it could have on the global economy, particularly in the key Asian market, said Julie Boote, an auto analyst at Pelham Smithers Associates.
"There are no Japanese automakers who have included that in their forecast," she said. "They still seem to be quite upbeat about the level of demand from Asia."
Nissan reported a profit of 58.0 billion yen for the year ended in March, slightly better than an upwardly revised 50-billion-yen profit forecast released late last month.
The company booked the profit on improved cost performance and a one-off boost tied to U.S. emissions regulations that offset a hit from Washington's tariffs.
Analysts, according to an LSEG survey, expected Nissan to report a fiscal year loss of 60 billion yen. In the year-earlier period, it posted a profit of 69.8 billion yen.
Like other carmakers, Nissan faces pressure from U.S. tariffs and fierce competition from Chinese electric vehicle makers in Europe and elsewhere.
It said U.S. tariffs dragged profit for the past financial year 286 billion yen lower.
Espinosa is trying to return Nissan to steady growth after years of turmoil by cutting jobs, manufacturing sites and the number of cars in its global line-up.
($1 = 157.8200 yen)
(Reporting by Daniel Leussink, Editing by Louise Heavens, Thomas Derpinghaus and Alexander Smith)
