Japan’s Nidec books 60% quarterly profit rise helped by EV motor demand

Japan’s Nidec books 60% quarterly profit rise helped by EV motor demand

Japanese electronic components maker Nidec Corp (6594.T) said on Wednesday its first-quarter operating profit jumped 60% to 44.6 billion yen ($406 million), helped by a rebound in demand for motors for electric vehicles (EVs) and home appliances.

Nidec, better known for producing electric motors for computer hard drives and smartphones, is trying to capture about a third of an emerging market for energy-saving EV motors known as e-axles. Demand for those is widely expected to increase 10 times over the next decade.

As it expands into auto parts, Nidec on Monday said it had agreed to consider a joint venture with Taiwan’s Hon Hai Technology Group to develop EV motors. The companies said in a news release they would aim to establish the venture in 2022, helping Nidec expand into new markets and ensuring a stable supply of motors for Hon Hai.

In April, Nidec, which supplies e-axles to automakers including China’s Guangzhou Automobile Co Ltd (601238.SS) and France’s Peugeot, announced plans to invest 200 billion yen over a decade to build a production hub in Serbia that will manufacture motors for EVs and household appliances.

Nidec’s earnings result for the three months to June 30, up from 28 billion yen a year earlier, was better than the 41.2 billion yen average of six analyst estimates compiled by Refinitiv.

Despite the rebound, a shortage of semiconductors had acted as a drag on sales and profits during the quarter by forcing its customers to cut production levels, Nidec president, Jun Seki, told a media briefing.

“We expect that output to recover during the second quarter,” he said.

The company stuck to its full-year forecast for operating profit of 180 billion yen. That is lower than the 193.5 billion yen average of 22 analyst estimates, Refinitiv data showed.

($1=109.8500 yen)