For immediate release
31 October 2000
NISSAN REPORTS BEST CONSOLIDATED HALF-YEAR OPERATING PROFIT
AND NET INCOME IN 10 YEARS
TOKYO (30 October 2000) – Nissan Motor Co Ltd today released preliminary financial figures showing a consolidated operating profit of 136.6 billion yen (1.43 billion euro), an operating margin of 4.5%, for the first six months of fiscal year 2000 – the best performance in a decade. The figures are evidence that the comprehensive Nissan Revival Plan is fully engaged, yielding higher-than-expected results, and that its strong commitments will be overachieved.
The consolidated figures were reported in filings with the Tokyo Stock Exchange as the company issued an official forecast for its half-year and revised the forecast for the full year. Official financial figures for the April-September 2000 period will be reported 20 Nov.
“The preliminary figures illustrate Nissan’s highest achievement in the last 10 years and are more than twice as high as last year’s first half,” Carlos Ghosn, Nissan’s president, said at a news conference. “And it is fair to say that this is only a beginning.”
Revenues were hampered by the appreciation of the yen and were virtually the same as the first half of the previous fiscal year at 3.05 trillion yen (31.94 billion euro) despite higher retail sales. Nissan’s improved world-wide operations led to a first-half ordinary profit of 133.5 billion yen (1.40 billion euro). Net income came to 170.2 billion yen (1.78 billion euro) as Nissan posted 39.6 billion yen (0.41 billion euro) in exceptional profits for the period.
Nissan reports best consolidated half-year operating profit…2
In the filings, Nissan revised its full fiscal year 2000 forecast, doubling operating profit to 220 billion yen (2.30 billion euro) and raising substantially its forecast for net income after taxes to 250 billion yen (2.62 billion euro).
The better-than-expected results for the half-year were fueled by significant cost reductions, particularly in purchasing, and increased worldwide sales of profitable vehicles.
While the impact of the revival plan unveiled by the company on 18 Oct. 1999 did not factor any benefit from growth, world-wide retail sales came to 1.337 million units, up 5.7 percent compared with the same period in the previous fiscal year.
The figures included negative impacts of 90 billion yen (0.94 billion euro) from foreign currency exchange and 32 billion yen (0.34 billion euro) mainly from competitive market and regulatory pressures.
These negative elements were more than offset by a 192 billion yen (2.01 billion euro) positive impact from cost reductions in purchasing as well as sales, general and administrative expenses.
Growth in vehicle sales volume world-wide contributed 4 billion yen (0.04 billion euro). Combined volume and product mix gains in North America, Europe and other markets world-wide offset a mediocre sales performance in Japan which had been expected by the company.
In addition Nissan reduced its net automotive debt by 200 billion yen (2.09 billion euro) during the first six months of the fiscal year, bringing the company’s estimated net automotive debt to 1.15 trillion yen (12.04 billion euro), 100 billion yen (1.05 billion euro) lower than the fiscal year-end forecast.
During his press conference, Mr. Ghosn also up-dated the progress made in the implementation of the NRP.
Nissan reports best consolidated half-year operating profit…3
At the centre of the NRP is an aggressive, world-wide product launch plan, with 22 all-new vehicles being introduced over three years. Two of the vehicles have been already introduced in Japan – the Bluebird Sylphy sedan and the Nissan X‑Trail sport-utility vehicle.
He reiterated the company’s guideline of 5 percent of sales devoted to capital expenditures with 60 percent focused on new-product and technology development.
Manufacturing plans for Japan are proceeding as outlined in the NRP. Nissan is in the process of optimising manufacturing capacity utilisation in North America and Europe to meet increased demand and to reduce exposure to foreign exchange fluctuations.
In addition, Nissan will make an announcement in the coming weeks about North American manufacturing strategy regarding the already announced full-size pickup truck and sport-utility vehicle as well as a new generation of Nissan minivan.
Despite the better-than-expected financial results for the half-year, Mr. Ghosn said many of the risks the company had forecast still remain.
Primary risks for the second half include continued weakness of the euro and increases in prices of energy and precious metals. Mr. Ghosn also cautioned that the slowdown in the U.S. market could be swifter and more severe than the company’s revised forecast of a 1.1 percent decline for the full fiscal year.
Mr. Ghosn also recognised that opportunities remain, including development of synergies with its Alliance partner Renault and continued strong implementation of the NRP.
“In the first half of 2000, we made significant strides. But it is only a step towards what we want to achieve,” Mr. Ghosn said. “Nevertheless, this first step is very motivating for all of us in Nissan. It stimulates us.”
Nissan reports best consolidated half-year operating profit…4
Under the NRP, the company has committed to attaining a consolidated net profit in fiscal year 2000, cutting consolidated net automotive debt in half to 700 billion yen (7.33 billion euro) or less and reaching a minimum operating margin of 4.5 percent by fiscal year 2002.
“Significant profitability in fiscal year 2000 will be achieved, and we are confident today that we will also achieve both the debt and the operating margin commitment by fiscal year 2002,” Mr. Ghosn said. “We are building a global company of Japanese essence, that we would like you, as we do, to be proud of and to respect.”
ends…
Note: yen euro conversion is for the convenience of the reader only. It has been calculated at 95.5 yen to 1 euro, the approximate exchange rate as of 30 September 2000.
For further information, contact:
Stewart McKee Manager Corporate Affairs 01923 899930
Email stewart.mckee@nissan.co.uk
All Nissan news releases can be downloaded from the Newspress website at http://www.newspress.co.uk
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