TOKYO – Japanese carmaker Nissan said on Tuesday its annual profit had more than halved than what it earned in the previous financial year, mainly due to declining sales in the United States and Europe.
The automaker, which has suffered a setback due to the arrest of its former chairman Carlos Ghosn on charges of financial misconduct, registered a net profit of 319.138 billion yen ($2.91 billion) in the financial year ending March 2019, a 57.3 percent drop year-on-year, according to the company’s financial results.
Nissan’s operating profit during the financial year, which covers the period from April 2018 to March 31, 2019, stood at 318.22 billion yen, a 44.6 percent drop compared to 2017-18, the Yokohama-based company said in its report.
The company’s sales turnover dropped 3.2 percent year on year to 11.57 billion yen.
“The company faced an unfavorable global business climate, and incurred short-term costs due to its initiatives to improve quality of sales in the US, as well as the implementation of a warranty extension campaign covering certain vehicles,” Nissan said in its statement.
The company sold a total of 5.516 million units across the world, a 4.4 percent drop, and as a result, Nissan’s market share fell 0.2 percent year-on-year to 6 percent.
In the US, its biggest market, the carmaker’s sales dropped 9.3 percent to 1.444 million units, due to efforts to normalize sales, while Europe sales registered a decline of 17. 8 percent to stand at 536,000 units, facing the impact of fulfilling environmental regulations, according to the statement.
“Despite the unfavorable business climate, sales in Japan (including mini-vehicles) rose by 2.1 percent to 596,000 units,” the company said.
For the ongoing financial year that ends on March 31, 2020, Nissan expects its net profit to fall by 46.7 percent to 170 billion yen, while the operating profit is expected to drop 27.7 percent to 230 billion yen, according to estimates released on Tuesday.
The carmaker also predicted a 2.4 percent drop in its sales turnover, expected to be around 11.3 billion yen.
The company has been struggling in the face of the arrest of Ghosn who faces allegations of fraud and misuse of company funds.
Ghosn, who is French and also has Brazilian and Lebanese nationalities, has already spent 108 days in detention for separate charges relating to under-reporting his salary and offsetting personal losses to Nissan.
He was released in March but was re-arrested when the more serious allegations arose. He is out on bail since April 25.