Abu Dhabi, UAESunday 26 May 2019

Nissan full-year net income plummets 57%

UPDATE: Lowest since 2009/10 when the company was struggling in the wake of the global financial crisis

Nissan headquarters in Yokohama. Car maker sees hard times ahead. AFP
Nissan headquarters in Yokohama. Car maker sees hard times ahead. AFP

Crisis-hit Japanese car company Nissan on Tuesday revealed net income at a near-decade low as it battles to recover after the shock arrest of its talismanic former boss Carlos Ghosn.

Net profits for the fiscal year to March 2019 came in at ¥319 billion (Dh10.65bn), the lowest amount since 2009/10 when the company was struggling in the wake of the global financial crisis according to AFP.

It was a decline of 57 per cent compared to the previous fiscal year for Japan's second-largest car maker.

"The performance is a challenging one and we want to change this," chief executive Hiroto Saikawa said.

The firm has been crippled by the reputational damage caused by the legal woes of former chairman Mr Ghosn, who faces four formal charges of financial misconduct that he denies.

Nissan also flagged annual profit for the next fiscal year would see a 28 per cent drop, Reuters reported. Operating profit will likely total ¥230bn in the year to March 2020, the company said.

Mr Ghosn, now released on bail, is awaiting a court decision after prosecutors hit him with a fourth set of charges over alleged financial misconduct.

Among other accusations, authorities suspect he syphoned off around $5m for his personal use from money transferred from Nissan to a dealership in the Middle East.

Mr Ghosn denies all allegations against him and insists on his innocence.

The scandal rocked the global car industry and has raised concerns about Nissan's ability to regain its footing following the departure of the charismatic leader and architect of its alliance with Renault.

The car maker also cut its mid-term revenue target to ¥14.5 trillion by 2022, from ¥16.5tn. It sees its annual operating margin at 6 per cent by then, versus an earlier target for 8 per cent.

Nissan said its management is "focusing its efforts on building an operational base that can ensure consistent and steady profitability over the medium term".

Key initiatives include reinforcing the company’s US operations and improving the efficiency of the firm's global investments and operations, while enhancing brand value through the launch of new models that embody Nissan Intelligent Mobility, it said.

"Fiscal year 2019 marks the start of these initiatives, and the company expects that the delivery of substantial improvements in performance will not be immediat," the car maker said in its earnings report.

Updated: May 14, 2019 01:37 PM

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