Nissan has posted a 70% decline in operating profit for the second quarter of the current fiscal year and it has also revised down the outlook for sales and profitability this year.
The latest set of results from Nissan underline the scale of the recovery challenge ahead for Nissan’s newly shaken-up management team with the company struggling to get its recovery back on track a year after the arrest of ex-chairman Carlos Ghosn on financial misconduct charges.
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Nissan is facing headwinds, including a stronger yen and slowing demand in key markets – especially North America and Japan.
Operating profit at Nissan came in at 30 billion yen during the July-September period versus 101.2 billion yen a year earlier. Revenues in the quarter were down 6.6% at 2,630.7 billion yen.
In the first half of the fiscal year Nissan’s global unit sales decreased 6.8% to 2.5 million units.
In the US, where Nissan profits have been dented by high incentives, April-September sales decreased 4.3% to 679,000 units.
Nissan admitted that operating profit for the first half is behind the original plan. In addition, the yen has strengthened against Nissan’s original assumption of 110 yen to the US dollar set at the beginning of the financial year. Furthermore, Nissan sees ongoing economic uncertainties and slowdown in total industry volume.
As a consequence of negative factors, Nissan has reduced its global vehicle sales forecast for the current fiscal year by 5.4% from the initial to 5.24 million units. The outlook for operating profit in the year has been revised down by 35.4% to 150 billion yen. It will also review a proposed dividend payout in the context of the midterm business plan.
