Nissan shrinks forecasts after Q2 profit plunges by 70%
By Duncan Ferris
Date: Tuesday 12 Nov 2019
(Sharecast News) - Nissan slashed its interim dividend and full-year forecasts on Tuesday, after reporting that falling sales had dealt a heavy blow to its second quarter profits.
The Japanese car giant slashed its full-year operating profit forecast by 35.0% to JPY150.0bn (£1.07bn), which would constitute a 53.0% drop compared to the year before.
The company also cut its guidance for net sales by 8% to JPY10.6tn and reduced its interim dividend by 65.0% to JPY10 per share.
The Nikkei-listed company reported operating profit of JPY30bn for the three months ended 30 September, for a 70% drop when compared to the same period last year.
Revenue dropped by 7% to JPY2.6tn as vehicle sales declined in major markets such as Japan, China and the US, with total vehicle sales dropping by 7.5% to 1.27m.
Meanwhile, selling, general and administrative expenses increased by 9% to JPY401bn, which Nissan attributed to regulatory compliance expenses, and increased raw material costs, combined with higher quality-related costs.
Looking ahead, the auto manufacturer said it will focus on turning around its fortunes in its largest market, North America, where second quarter sales declined by 5% to JPY1.4tn and operating profit remained flat at £35.9bn.
Incoming chief financial officer Stephen Ma said the US business had taken its "first steps towards recovery" after Nissan stopped trying to increase its market share, while he also appeared to leave the door open for further restructuring efforts.
"Given the current market situation and the economic situation, naturally we are now revisiting all our assumptions," said Ma.
Nissan shares were up by 1.00% at JPY714 at the close of trade in Tokyo.
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