Wed, Feb 13, 2019 - Page 10 News List

Nissan books charge on Ghosn; profit forecast cut


Nissan Motor Co took an US$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 would be ¥450 billion (US$4.1 billion) this fiscal year, Nissan said yesterday.

That is down from its previous forecast of ¥540 billion and below the lowest of analysts’ estimates.

Sales in the US and China are falling amid an industry-wide 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 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.

The one-time charge of ¥9.2 billion 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 US dollars.

Sales in China, Nissan’s largest market, fell 4 percent in the October-to-December last year quarter.

Nissan relies heavily on China, which is estimated to become its largest market. The company plans to invest US$9 billion and introduce 20 electrified models there within three years.

Nissan’s US sales last month plunged 19 percent, after slumping 6.2 percent last year.

The US market has been a major drag for Nissan in the past quarters. Sales in the Japanese automaker’s domestic unit rose about 32 percent in the December quarter, helped by the previous year’s low base when shipments were hit by an inspection scandal.

Nissan kept its projected full-year dividend at ¥57 a share, a boon for shareholders, including Renault, which owns 43 percent of Nissan.

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