Nidec’s founder returns as CEO after profit miss – Metro US

Nidec’s founder returns as CEO after profit miss

Nidec Corp’s logo is pictured at an earnings results news
Nidec Corp’s logo is pictured at an earnings results news conference in Tokyo

By Satoshi Sugiyama and Tim Kelly

TOKYO (Reuters) -The founder of Nidec Corp is returning to the role of CEO less than a year after relinquishing it, the Japanese electric motor maker said on Thursday, as it reported quarterly earnings that missed expectations.

Shigenobu Nagamori, who founded Nidec in 1973 and is also its chairman, will replace Jun Seki, who is returning to the position of chief operating officer with immediate effect.

“In all honesty, I’m disappointed,” Seki told a news conference.

In January, both executives dismissed media reports that Nagamori had regretted hiring Seki to succeed him as CEO, saying they continued to work closely together. Nagamori denied the reports again on Thursday.

“We’ve reached a stage where we need to make quick decision and take actions swiftly as various economic and political problems have emerged,” Nagamori said.

“In times like these, I, as the founder of the company who knows everything, will take the lead in the short term to further improve business performance.”

Nagamori also took issue with the company’s stock price, which has plummeted 33% over the past year.

The news came as Nidec posted an operating profit of 36.9 billion yen ($287.85 million) for the final quarter of the financial year (January-March), down from 44.5 billion yen a year earlier.

That was below the average forecast of 48.5 billion yen from five analysts surveyed by Refinitiv.

Nagamori recruited Seki, a former Nissan Motor Co executive, in 2020 to help Nidec’s drive to become a major player in components for next-generation automobiles.

The founder said Seki would focus on the company’s electric vehicle business and estimated it would take about three years for Seki to return to the CEO position.

Kyoto-based Nidec is known for building motors for computer hard drives and smartphones, but has said it aims to capture 40-45% of an expanding market for energy-saving electric car motors known as e-axles by 2030.

The company said its e-axle accounted for 27% of China’s electric vehicle market in calendar year 2021, and it hopes mass-producing its new model will provide the momentum for higher profits after fiscal year 2025.

For the business year that began April 1, the company forecast operating profit to rise 23% to 210 billion yen.

Nidec’s shares closed up 2.4%, before the announcement of the results and leadership change.

($1 = 128.1900 yen)

(Reporting by Tim Kelly and Satoshi SugiyamaEditing by Simon Cameron-Moore and Mark Potter)

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