Nissan Motor Company on Wednesday said it expects to report record operating profits of 737 billion yen ($US6.04 billion, euro 6.25 billion) for fiscal year 2002, which ended March 31, 2003. Announcing preliminary financial results for the full year, president and CEO Carlos Ghosn said the company expects to report a consolidated net profit after tax of 495 billion yen ($4.06 billion, euro 4.19 billion). Nissan expects its net automotive debt – which stood at 2.1 trillion yen at the start of fiscal year 1999 – to be completely eliminated.
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Nissan expects to report consolidated revenues of 6.85 trillion yen ($56.15 billion, euro 58.05 billion), up 10.6% from the prior fiscal year. Consolidated operating profit is expected to jump 50.7% to a record 737 billion yen, up from 489.2 billion yen in fiscal year 2001. The resulting operating margin should reach 10.8%, which is the top level in the global automotive industry.
At constant accounting standards, Nissan expects to report a net cash position of 8 billion yen ($66 million, euro 68 million). Its net automotive debt has been eliminated, down from 431.7 billion yen ($3.54 billion, euro 3.66 billion) at the beginning of fiscal year 2002.
“Nissan’s revival is a reality,” said Ghosn. “Three years ago, our business was in accelerated decline. Today, we’re not only back in the global race, we’re among the pacesetters. Debt elimination is no longer a driver in the management of our business. From now on, return on invested capital – which is estimated to reach 19.5% in fiscal year 2002 – will take centre stage.”
Fiscal year 2002 was the biggest new product year in company history, with 12 all-new models. Nissan sold 2,771,000 vehicles worldwide, an increase of 174,000, or 6.7%, over fiscal year 2001 sales.
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By GlobalData“Our sales were made on the merits of our products themselves. They were not inflated by additional incentives,” Ghosn claimed. “Our strategy continues to be based more on optimising profitability than maximising volumes.”
Wednesday’s announcement summarised achievements made during the first year of so-called ‘Nissan 180’, the company’s three-year plan aimed to establish sustainable, profitable growth. The plan has three commitments: to achieve a million additional sales worldwide by the end of fiscal year 2004, compared to fiscal year 2001; to achieve an 8% operating margin; and to achieve zero net automotive debt, using constant accounting standards. Two of the three goals have been reached in the first year of the plan.
Looking ahead, Nissan said risks for the fiscal year ending March 31, 2004 include weaker economic conditions in Japan and further decreases in the total industry volume and/or even higher-than- foreseen incentives in the United States and Europe.
In a forecast filed with the Tokyo Stock Exchange, Nissan said full-year consolidated net sales are expected to reach 7.45 trillion yen ($62.08 billion, euro 57.31 billion), an increase of 8.8% from FY02.
Operating profit is expected to be 820 billion yen ($6.83 billion, euro 6.31 billion), an increase of 11.3%. Ordinary profit is expected to be 781 billion yen ($6.51 billion, euro 6.01 billion), an increase of 10.2%.
The company expects to achieve a net profit of 495 billion yen ($4.13 billion, euro 3.81 billion), with the expectation of a return to normal tax treatment in Japan.
Net cash generated by operations is estimated at 100 billion yen ($833 million, euro 769 million) even after the 120 billion yen investment to buy a 50% stake in China’s Dong Feng.
