Nissan warns on full-year profits

Nissan warned on Tuesday that operating profit would fall to the lowest level in 11 years for the fiscal year to March 2020 as it takes a hit partly from the arrest of former chairman Carlos Ghosn.

In the year to the end of March 2019, operating profit declined 44.6% to 318.2bn yen on net revenues of 11.57 trillion yen, down 3.2% on the year. The company said it now expects operating profit of 230bn yen for the year to March 2020.

The car maker also said it was cutting its revenue target to 14.5 trillion yen by 2022 from 16.5 trillion yen.

"The company faced an unfavourable global business climate, and incurred short-term costs due to its initiatives to improve quality of sales in the US, as well as the implementation of a warranty extension campaign covering certain vehicles," it said.

Global unit sales fell 4.4% during the year to 5.516 million . In China, where its results are calculated on a calendar-year basis, Nissan said it saw "strong" performances by the new Kicks, X-Trail and Sylphy, leading to a 2.9% increase in unit sales to 1.564 million, equivalent to a market share of 5.9%.

In the US, meanwhile, the company's unit sales declined 9.3% to 1.444 million, equivalent to a market share of 8.4%.

Sales in Europe, excluding Russia, were down 17.8% to 536,000 units, resulting in a market share of 3.0%. Unit sales in Russia, however, rose 2.6% to 107,400 units.

In other markets, including Asia and Oceania, Latin America, the Middle East and Africa, sales dropped 0.4% to 815,000 units.

"Nissan’s 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 company’s global investments and operations, while enhancing brand value through the launch of new models that embody Nissan Intelligent Mobility.

"Fiscal year 2019 marks the start of these initiatives, and the company expects that the delivery of substantial improvements in performance will not be immediate."

Nissan's former chairman Carlos Ghosn is currently on bail, having been charged with under-reporting his income in the company's financial statements for several years and transferring personal losses onto Nissan's books. He denies all charges.