Monday , August 26 2019

Nissan books $83mn Ghosn-related charges as profit forecast cut

Bloomberg

Nissan Motor Co. took an $83 million charge related to the compensation of former Chairman Carlos Ghosn as the Japanese automaker reeling from the shock arrest of the iconic executive warned of its lowest profit in six years.
Operating profit will be 450 billion yen ($4.1 billion) this fiscal year, Nissan said on Tuesday. That’s down from Nissan’s previous forecast of 540 billion yen and below the lowest of analysts’ estimates.
Sales in US and China are continuing to wane amid an industrywide slump, intensifying the pressures on Chief Executive Officer Hiroto Saikawa who is trying to ease tensions with partner and shareholder Renault SA following Ghosn’s arrest. The companies have spent the last 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.
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. The so-called deferred pay has emerged as a point of focus for Tokyo prosecutors who have indicted Ghosn for allegedly understating his income at Nissan by tens of millions of dollars.
Sales in China, Nissan’s largest market, fell 4 percent in the October-December quarter. Nissan relies heavily on China, which is estimated to become its largest market. The company plans to invest $9 billion and introduce 20 electrified models there within three years.
Nissan’s US sales plunged 19 percent in January, after slumping 6.2 percent in 2018. The US market has been a major drag for Nissan in the past quarters. Sales in the Japanese carmaker’s domestic unit rose about 32 percent in the December quarter, helped the previous year’s low base when shipments were hit by an inspection scandal.
Nissan kept its projected full-year dividend at 57 yen a share, a boon for shareholders including Renault, which owns 43 percent of Nissan.

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