Nissan full-year revenue exceeded $1.6 billion
13 May 2022
Nissan Motor Co., TOKYO On Thursday, Ltd. announced a positive full-year revenue for the first time in three years, citing cost-cutting initiatives and a stronger US market, but gave cautious expectations.
Even before the disruption created by the coronavirus outbreak and, more recently, Russia’s invasion of Ukraine, the Japanese automobile giant was on a roller coaster.
It is now undertaking a plan that includes eliminating models, cutting expenses, and restructuring operations in order to combat falling demand and the aftermath from the arrest of its former CEO Carlos Ghosn.
It credited some of these efforts in generating a net profit of 215.5 billion yen ($1.67 billion) for fiscal year 2018–2019, exceeding its expectation of 205 billion yen.
However, it cautioned that the market would be “more severe than in fiscal year 2021” due to “semiconductor supply bottlenecks, higher raw material prices and logistics costs, the Ukraine conflict, and the impact of Chinese components supply lockdowns.”
It expects a full-year revenue of 150 billion yen for the current fiscal year, following the cautious lead of other automakers battling supply disruptions.
“It is clear that our industry and, as a result, our performance were impacted by intensifying headwinds in the previous fiscal year,” Nissan Chief Operating Officer Ashwani Gupta said. “These challenges, which were magnified in the fourth quarter with rising energy prices, continued supply chain shortages, and ongoing Covid disruptions,” he added.
“While Nissan has put in place nimble business continuity measures, the market’s constant fluctuations are causing unprecedented uncertainty,” he continued.
A resurgence in demand and the effects of a weaker yen, which has recently hit 20-year lows versus the US dollar, benefited the company’s bottom line.
Nissan’s profits from overseas sales are inflated by a weaker yen, which is one element helping to buoy up profitability for several Japanese carmakers while they confront supply chain bottlenecks.
Nissan also declared that, in light of its strong performance, it would pay a dividend for the first time in three years.
Even before the global health crisis, the company was dealing with rising sales costs as well as the Ghosn saga.
The former auto magnate was arrested in Japan in 2018 on charges of financial malfeasance, which he denies, but he jumped bail and fled to Lebanon the following year.
In March, a Tokyo court sentenced former Nissan executive Greg Kelly to a six-month suspended sentence for allegedly assisting his employer in concealing income.
Ghosn, who has lived in Lebanon since his spectacular escape, was issued an international arrest order in April on allegations of wrongdoing, misappropriation of business assets, and money laundering.
Nissan, like other automakers, has been aiming to improve its electrification mix, with the target of electrifying more than 40% of its models by 2026.
Gupta added that the company was increasing its battery development efforts, including producing solid-state batteries in-house.
