Nissan warns of net loss in pandemic’s wake

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TOKYO — Nissan, already reeling from plunging profits and sales before the COVID-19 pandemic hit, is warning that the global outbreak could deliver a net loss of close to $1 billion.

Nissan will sink to an operating loss of between 35 billion yen to 45 billion yen ($324.6 million and $417.4 million) and book an even worse net loss of between 85 billion yen to 95 billion yen ($788.4 million to $881.2 million), Japan’s No. 2 automaker said in a release on Tuesday.

Nissan’s latest profit warning marks its third profit revision for the fiscal year ended March 31. Nissan’s prior forecast predicted operating profit would fall 73 percent and that net income would plunge 80 percent. But that now-scrubbed guidance still called for razor thin profits.

The automaker blamed the revision on the pandemic’s impact on sales and the possible booking of a one-time loss. Nissan’s global sales fell 43 percent in March and were down 13 percent for the first three months of the year. Further hits came from provisions for Nissan’s sales finance business.

“The deterioration in operating profit includes impacts from the decline in sales of vehicles and parts of approximately 90 billion yen ($834.8 million),” Nissan said. “Nissan anticipates additional time to finalize the results and is currently reviewing the precise financial impact.”

Nissan said it will postpone the announcement of full fiscal year results until May 28. It had earlier planned to announce earnings mid-month.

Nissan said the most recent profit warning does not include the impact of a revision of the company’s mid-term business plan. That plan, to be coordinated with alliance partners Renault and Mitsubishi, was also expected to be announced later this month. Nissan said there may be additional one-time costs associated with the revision of the mid-term plan.

Renault and Mitsubishi recently issued their own dour outlooks.

Renault said its global sales plunged 26 percent to 673,000 units in the January-March quarter, pushing revenue down 19 percent. Renault had earlier suspended its full-year profit guidance.

Mitsubishi warned that it will also slump to a net loss in the fiscal year ended March 31 and book an 89 percent tumble in operating profit. It said it would cut executive pay almost in half.

 

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Saurabh Shukla

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