Nissan Motor president and CEO Makoto Uchida announces the company's third quarter financial results in Yokohama on Thursday. Photo: AFP
business

Nissan net profit plunges 87% for 9 months to December

18 Comments
By Behrouz MEHRI

Crisis-hit Japanese automaker Nissan said Thursday its net profit plunged more than 87 percent for the nine months to December as it struggles with weak demand and fallout from the arrest of former boss Carlos Ghosn.

Nissan revised downwards its full-year sales and profit forecasts, but warned that the impact from the spreading coronavirus crisis was not yet included in their figures.

"Let me express my sincere regrets to shareholders. The company results are weaker than expected," said CEO Makoto Uchida, who announced there would be no dividend paid.

Net profit for April-December dropped 87.6 percent to 39.3 billion yen ($358 million), on sales down 12.5 percent at 7.5 trillion yen for the period.

On a quarterly basis, Nissan suffered a net loss of 26.1 billion yen for the three months to December, the first third-quarter loss in more than a decade.

The profit decline was mainly due to weak sales in the United States as well as Japan, where the impact of the nation's sales tax hike hit auto demand, the company said in a statement.

"Nissan is in a very severe situation at a time when competition in the global auto market is further intensifying," said Satoru Takada, auto analyst at TIW, a Tokyo-based research and consulting firm.

Nissan, which downgraded its annual forecasts three months ago, said its bottom-line profit was now forecast to be 65 billion yen for the fiscal year to March 2020, compared with an earlier estimate of 110 billion yen.

Full-year sales are estimated at 10.2 trillion yen, down from a previous forecast of 10.6 trillion yen but Uchida said the latest forecast did not include the potential impact of the novel coronavirus.

"The market remains tough due in part to the novel coronavirus outbreak," Uchida told reporters.

Analysts are weighing the possible impact of the virus on production in China. Nissan has already suspended operations at four assembly plants in the country. It aims to resume operations at two plants next week, but has not decided whether to extend the closure at the remaining two.

It was Nissan's first earnings announcement since Ghosn dramatically jumped bail and fled Japan, where he was awaiting trial on financial misconduct charges.

Ghosn, who was arrested in November 2018 and spent 130 days in detention, denied all the charges and claimed he was a victim of a plot by Nissan and Japanese officials.

On Wednesday, Nissan filed a civil lawsuit to reclaim some 10 billion yen from Ghosn for what it called "years of his misconduct and fraudulent activity".

Uchida took the Nissan helm in December as the firm overhauled its leadership after the Ghosn scandal.

"Nissan replaced its leaders but has yet to show a roadmap for revival, and is still making an extra effort to settle the Ghosn case," Takada said.

Adding to Nissan's woes is continued tension within the three-way alliance with Mitsubishi Motors and Renault.

Ghosn, who created the alliance, wanted greater integration with France's Renault, and says his push for that prompted angry Nissan executives to plot against him.

The two firms have made a show of holding the marriage together in the wake of Ghosn's arrest, but tensions have bubbled to the surface.

"Ghosn had both good and bad aspects, but Ghosn's leadership was a cornerstone of the alliance and they have yet to find a matching leadership," Takada said.

Last week, rival Toyota reported a surge in net profit on record sales for the nine months to December, and upgraded its full-year profit.

Honda revised up its full-year profit forecasts but warned that the impact from the spreading coronavirus crisis was not yet included in their figures.

Nissan shares plunged 1.54 percent to 568.5 yen ahead of the third-quarter earnings report.

© 2020 AFP

©2020 GPlusMedia Inc.


18 Comments
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 as it struggles with weak demand and fallout from the arrest of former boss Carlos Ghosn.

There they go blaming Ghosn for all their woes (again). Personally, I think they only have themselves to blame. The underhanded corporate coup of Ghosn. The treatment he received by the Japanese injustice system. Letting that criminal Sakaiwa get off free by plea bargaining to point the finger at Ghosn. These have all danaged the image and reputation of Nissan, all of which were brought on by themselves.The fact is, Ghosn should never have been arrested. His mismanagement of funds should have been dealt with internally by Nissan. But, they went ahead with the 'Get the gaijin' scenario and screwed themselves in the process. Congratulations Nissan!

14 ( +14 / -0 )

Hey Nissan, its getting increasingly difficult to keep blaming Carlos for your dismal performance after 15 months isn,t it? .The backstabbers in the J-management ranks seem to be clueless about what they are supposedly getting paid for ,ie...you know running the company. Well done, hows that blue chip pinnacle of J-Inc that needs to be kept from foreign hands going now?

13 ( +13 / -0 )

And the slide into mediocrity accelerates! The overseas talent will flee / avoid Nissan and the J management will muddle around, unsure what to do and obsessed with trying to "destroy" Ghosn.

The value of Renault's stake will sink like a rock.... which could make things interesting.

But, within 5 years, Nissan will likely be on the verge of bankruptcy.

11 ( +11 / -0 )

You brought this upon yourself Nissan. What could've been an internal issue with Ghosn, should've been resolved within. As a customer, how can I trust that you can take care of me, when you cant take care of yourself?

11 ( +11 / -0 )

Time to stop blaming Carlos. He has been out of the picture for almost two years. How many more years will he be blamed for the continued decrease?

if he was so bad and distrusted, why aren’t stocks and sales going up after his departure. Usually people would invest more in a company that has removed a bad apple. I sure would.

10 ( +10 / -0 )

Fist it was Ghosn now it’s COVID-19. Where’s Saikawa’s name? Someone’s protecting him, and the media is conspiring with them.

9 ( +9 / -0 )

Nissan shares plunged 1.54 percent to 568.5 yen ahead of the third-quarter earnings report.

What hyperbole! This is a blip. Nissan stock may get so cheap that Renault can buy the whole company.

5 ( +5 / -0 )

nissan must understand that it is nissan themselves that had made this bad publicity. WHO IS GOING TO purchase the product of a company that have no intergrity ???. What had corona virius to do with selling car ???. See, always some kind of excuses.

5 ( +5 / -0 )

Blaming others for your incapability.

Didn't we have this (other person, other place) before?

Seems to become the new way of life.

And as for Nissan, I guess that won't be the end yet!

4 ( +4 / -0 )

Maybe it's time to put the whole Ghosn thing behind them. Top management aside, there are good working people with families who are worried about their jobs! This relentless pursuit of Ghosn will be the downfall of the company

4 ( +4 / -0 )

They've cancelled the dividend. Renault won't be happy about that.

4 ( +4 / -0 )

I remember when Ghosn started with NISSAN and the company was near bankruptcy. The company exhibited the same tendencies as now: blaming everything and everyone. Ghosn would had none of that and disciplined his meetings to stop the blaming and focus purely on the numeasurements. NISSAN has run away the very solution to it’s problem. Now, NISSAN is back to it bad habits and blame game. But this time it won’t be saved.

3 ( +3 / -0 )

That lawsuit against Ghosn isn't even a drop in the bucket... it would be the height of irony if Nissan were finally taken over by Renault after all this. Not that its demise will ever be anything other than his fault, of course...he only saved the company so he could later destroy it.

3 ( +3 / -0 )

"Nissan stock may get so cheap that Renault can buy the whole company." Or Hynudae, Daewoo or Kia...

3 ( +3 / -0 )

At this rate I think Nissan will go bankrupt before they get anywhere near clawing back what Ghosn supposedly owes them...

2 ( +2 / -0 )

They've cancelled the dividend. Renault won't be happy about that.

Neither will the people who invested in this company!

2 ( +2 / -0 )

They wheeled out 3 Indian accountants during the conference, who tried to talk about cash flow, how a big push in 4Q would solve their problems, and how one of them would go to the US auto show and promote Nissan personally! No talk of any concrete strategy, plans or anything that would convince people that they were doing something right. Circling the drain...

1 ( +1 / -0 )

Nissan has a Management issue. If the share price keeps dropping, then they may end up being bought out by Renault.

1 ( +1 / -0 )

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