Nissan cuts outlook and books Ghosn charges

Marco Green
February 12, 2019

Japan's third-largest automaker by market value slashed its operating profit forecast to 450 billion yen ($4.1 billion), below the lowest of analysts' estimates as sales in China and the USA continue to wane.

The company is now looking at operating profit of $4 billion for the year, down from its prior projection, according to the Wall Street Journal.

Nissan Motor Co.'s profit in the October-December quarter was 70.4 billion yen ($637 million), down from 301.6 billion yen the previous year.

The Japanese automaker, in its first results since Ghosn was detained in November, unveiled an $84 million charge linked to deferred compensation for the executive who has been indicted for under-reporting his salary at Nissan over 2010-2018.

In the wake of the Ghosn affair - in which the alleged improprieties occurred over almost a decade - Nissan has pledged to review its governance, including a possible overhaul of the board's composition.

He has said he is innocent of any wrongdoing and is the target of a conspiracy to oust him from the company he helped turn around when it was on the brink of bankruptcy 20 years ago.

The one-time charge of 9.2 billion yen to reflect Ghosn's yet-to-be-paid remuneration shows Nissan and Renault are set to feel reverberations from the scandal for a long time.

"In the past few years there's been a lot of talk about "convergence" of the two companies' operations", Saikawa said, referring to one of Ghosn's key aims for the alliance.

Saikawa said Jean-Dominique Senard, who recently replaced Ghosn as chairman of Nissan's alliance partner Renault SA of France, will visit Japan later this week for meetings.

"So we want to raise our performance by improving the quality of sales", he added.

Renault owns 43 per cent of Nissan, and Nissan owns 15 per cent of Renault. The companies have spent the past two months coping with a major reputational hit from the scandal, indictments by Tokyo prosecutors over alleged financial improprieties and an unflattering spotlight on both companies' corporate-governance controls.

Other reports by Click Lancashire

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