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Nissan Motor sees $4.5 billion annual operating loss as pandemic hinders turnaround efforts

It forecast an operating loss of 470 billion yen ($4.5 billion), which would be its biggest according to Nissan data that goes back to 1977 and much larger than a consensus estimate of a 262.8 billion yen loss drawn from 20 analysts polled by Refinitiv.

July 28, 2020 / 02:21 PM IST

Nissan Motor Co said on Tuesday it expects to make an annual operating loss for a second straight year, as the coronavirus pandemic hampers its efforts to emerge from a deep slump in sales.

It forecast an operating loss of 470 billion yen ($4.5 billion), which would be its biggest according to Nissan data that goes back to 1977 and much larger than a consensus estimate of a 262.8 billion yen loss drawn from 20 analysts polled by Refinitiv.

It predicted revenue would plunge by a fifth to 7.8 trillion yen and global vehicle sales would fall 16.3 percent.

Years of aggressive expansion, particularly in emerging markets, has left Japan's No. 2 automaker with dismal margins, an ageing portfolio and a tarnished brand.

Still reeling from the 2018 arrest and ouster of former CEO Carlos Ghosn, Nissan unveiled a far-reaching restructuring plan in May that calls for a dramatic reduction in production lines and its vehicle model range.

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In the first quarter, Nissan posted an operating loss of 153.9 billion yen, its second consecutive quarterly loss after falling 94.8 billion yen into the red in January-March.

Nissan's woes have highlighted the fragility of its automaking partnership with France's Renault SA which has also announced a major restructuring as it rows back on policies pursued by Ghosn, now a fugitive wanted on charges of financial misconduct in Tokyo. Ghosn denies the charges.

Mitsubishi Motors Corp, a junior partner in the three-way alliance, saw its shares tumble some 13 percent on Tuesday after sales in Southeast Asia plunged 70 percent during the April-June quarter.

Follow our full coverage of the coronavirus pandemic here.
Reuters
first published: Jul 28, 2020 02:10 pm

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