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Nissan cuts profit forecast after 70 pc quarterly plunge

Nissan cuts profit forecast after 70 pc quarterly plunge

YOKOHAMA, Nov 12: Nissan Motor Co reported a 70 per cent drop in quarterly profit on Tuesday and cut its full-year forecast to an 11-year low, hit by a strong yen and falling sales, and highlighting the turmoil at the Japanese automaker after the ouster of Carlos Ghosn, reports Reuters. The latest weak showing from Nissan, which also slashed its interim dividend by 65 per cent after its worst second-quarter performance in 15 years, illustrates the scale of the work ahead for its new executive team, which is due to take over on Dec. 1. Following the ouster of former chairman Ghosn almost a year ago, Nissan has been battered by falling profit, uncertainty over its future leadership and tensions with top shareholder Renault SA - whose shares fell 2 per cent to their lowest since April 2013 after Nissan’s downbeat guidance. Nissan shares, down 19 per cent this year, closed up 1 per cent at 714.5 yen before the results announcement. Operating profit at Japan’s second-biggest automaker by sales came in at 30 billion yen ($275 million) in July-September versus 101.2 billion yen a year earlier. That compared with a mean forecast of 47.48 billion yen from nine analyst estimates compiled by Refinitiv. Nissan announced an interim dividend of 10 yen per share, down from 28.50 yen a year ago. The company’s global vehicle sales fell 7.5 per cent to 1.27 million in the quarter. Sales in China, its biggest market, fell 2.5 per cent, while those in the United States fell 4.5 per cent. “Our sales in China outpaced the market, but sales in other key regions, including the US, Europe, and Japan underperformed,” Stephen Ma, a corporate vice president who will become chief financial officer next month, told reporters. Slowing demand for cars in the United States and China, the world’s biggest auto markets, has led to cut-throat competition, and Nissan’s slump in first-half sales has knocked operating profit off course from the automaker’s full-year target. “We are revisiting all our assumptions, and as you can see that is why we revised down our forecast for sales volume for the full year,” Ma said. Nissan slashed its full-year operating profit forecast by 35 per cent to 150 billion yen, which would be its worst full-year performance in 11 years. It now sees global retail sales at 5.2 million vehicles, down from a previous forecast for 5.5 million, bracing for its worst annual sales in six years. The latest weak showing from Nissan, which also slashed its interim dividend by 65 per cent after its worst second-quarter performance in 15 years, illustrates the scale of the work ahead for its new executive team, which is due to take over on Dec. 1. Following the ouster of former chairman Ghosn almost a year ago, Nissan has been battered by falling profit, uncertainty over its future leadership and tensions with top shareholder Renault SA - whose shares fell 2 per cent to their lowest since April 2013 after Nissan’s downbeat guidance. Nissan shares, down 19 per cent this year, closed up 1 per cent at 714.5 yen before the results announcement. Operating profit at Japan’s second-biggest automaker by sales came in at 30 billion yen ($275 million) in July-September versus 101.2 billion yen a year earlier. That compared with a mean forecast of 47.48 billion yen from nine analyst estimates compiled by Refinitiv. Nissan announced an interim dividend of 10 yen per share, down from 28.50 yen a year ago. The company’s global vehicle sales fell 7.5 per cent to 1.27 million in the quarter. Sales in China, its biggest market, fell 2.5 per cent, while those in the United States fell 4.5 per cent. “Our sales in China outpaced the market, but sales in other key regions, including the US, Europe, and Japan underperformed,” Stephen Ma, a corporate vice president who will become chief financial officer next month, told reporters. Slowing demand for cars in the United States and China, the world’s biggest auto markets, has led to cut-throat competition, and Nissan’s slump in first-half sales has knocked operating profit off course from the automaker’s full-year target. “We are revisiting all our assumptions, and as you can see that is why we revised down our forecast for sales volume for the full year,” Ma said. Nissan slashed its full-year operating profit forecast by 35 per cent to 150 billion yen, which would be its worst full-year performance in 11 years. It now sees global retail sales at 5.2 million vehicles, down from a previous forecast for 5.5 million, bracing for its worst annual sales in six years.

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