Nissan Motor Company expects to report a consolidated operating profit of 490 billion yen ($US3.92 billion, 4.50 billion euros) and a consolidated net profit after tax of 372 billion yen ($2.97 billion, 3.42 billion euros) for the financial year to 31 March 2002.
Announcing preliminary results, Nissan also said its revival plan (NRP) had been completed a year ahead of schedule. A new three-year business plan called ‘Nissan 180’ began on 1 April.
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Nissan expects to report consolidated net sales of 6.2 trillion yen ($US49.56 billion, 57 billion euros), up 1.8% from last fiscal year. Consolidated operating profit is expected to jump 68% from 290.3 billion yen last year to 490 billion yen ($US3.92 billion, 4.50 billion euros) this year. The resulting operating margin should come to 7.9% of net sales, the highest in the company’s history.
Nissan expects net automotive debt to decline by 518 billion yen ($US4.14 billion, 4.76 billion euros) to 435 billion yen ($US3.48 billion, 4.00 billion eurso) well below the NRP commitment of 700 billion yen. The swift reduction of debt is due to the strong recovery of profits and the continued sale of non-core assets including the sale of the entire portfolio of marketable securities in Japan.
Under the Nissan 180 plan, the company aims to sell an additional million vehicles by the end of fiscal 2004 by launching at least 28 new vehicles over three years. The company will enter new segments and new markets worldwide to help this growth.
In addition to increased revenue, Nissan will continue to improve efficiencies as the company has set cost reduction plans globally. Ghosn announced targets for areas including purchasing, manufacturing, logistics and distribution. The consolidated operating margin resulting from the combination of growth and cost reductions will reach 8% under the plan.
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By GlobalDataTo support its growth strategy, Nissan will increase its capital expenditures to 5.5% of net sales and maintain R&D spending between 4.0 to 4.5%. However, as the company continues to generate higher profits and completes it divestiture of non-core assets, Nissan foresees the elimination of net automotive debt by the completion of the new plan.
Nissan sold 2,597,000 vehicles worldwide in fiscal 2001, down 1.4% from 2000. However the company showed a better performance in the second half than in the first half as new products such as the Altima in the United States and all-new March (Micra) in Japan were launched. Sales declined 3.6% year on year in the first half, but increased 0.8% in the second half.
Looking ahead to fiscal year 2002, Nissan sees risks including a decline in the value of the dollar relative to the yen and a harsher competitive environment than planned.
Opportunities include potentially more favourable total industry volumes, particularly in the United States. However, the biggest opportunity for the year lies in the swift implementation of the Nissan 180 plan.
Based on this outlook Nissan has filed with the Tokyo Stock Exchange a forecast for fiscal year ending March 31, 2003 with consolidated net sales of 6.5 trillion yen, operating profit of 553 billion yen, ordinary profit of 488 billion yen and a net profit of 380 billion yen.
The company also said that consolidated net automotive indebtedness should come to less than 250 billion yen by the end of the period.
