Nissan Announces Financial Results For First Half Of Fiscal Year
10 November 1998
Nissan Announces Financial Results For the First Half Of The Fiscal Year Ending March 1999
NEW YORK, Nov. 10 -- Nissan Motor Co., Ltd.
announced today the company's non-consolidated financial results for the first
half (April 1 - September 30, 1998) of the fiscal year ending March 31, 1999.
Non-Consolidated Financial Results for the First Half
Non-consolidated net sales came to 1,638.5 billion yen
($12,137.7 million), down 137.5 billion yen or 7.7% from the same period of
the previous fiscal year. In the domestic market, industry-wide sales of new
vehicles slumped as a result of the economic recession. Amid this market
downturn, Nissan's total new vehicle deliveries to domestic dealers for the
first half came to 435,000 units, down 58,000 units or 11.8% from the same
period last year. The company's new vehicle registrations for the period
totaled 434,000 units, a decrease of 33,000 units or 7.0% from the
corresponding period of last year. However, due to the downturn in the
Japanese market, Nissan's market share actually increased 0.3 points from the
same period of last year to 20.9%. Meanwhile, exports for the first half
totaled 344,537 units, down approximately 13,000 units or 3.6%. Despite an
increase in the number of units shipped to Europe, the company's overall
exports declined, mainly as a result of successful efforts in the U.S. to
adjust inventories in line with the industry.
Despite the company's continued cost-cutting and streamlining efforts and
foreign exchange profits from the weak yen, the company's operating profit
decreased by 29.9 billion yen or 59.2 % year on year to 20.6 billion yen
($152.6 million). The decrease reflects the overall slump in domestic vehicle
demand and decreased exports to the U.S. The company came in with an ordinary
profit of 28.8 billion yen ($213.7 million), a decrease of 16.5 yen billion or
36.4% from the previous year's first half profit of 45.3 billion yen.
During the first half of the current fiscal year, the company's net of
non-operating income and expenses amounted to 8.2 billion yen ($61.0 million),
representing an increase of 13.4 billion yen over the previous first half.
This improvement is due primarily to the sale of the company's marketable
securities holdings. Net of special gains and losses came to a loss of
61.3 billion yen ($454.5 million), a decline of 54.5 billion yen over the
figure for the previous first half. The decrease resulted mainly from a
marketable securities valuation loss of 76.0 billion yen ($563.0 million) in
the first half. As a result, the company sustained a net loss of 32.5 billion
yen ($241.1 million), posting a year-on-year fall of 71.0 billion yen from a
profit of 38.5 billion yen recorded in the previous first half.
Non-Consolidated Forecast for the Fiscal Year Ending March 1999
Net Sales
The company estimates net sales for the full fiscal year at
3,400 billion yen, down 4.1% from the previous year, considering continuing
sluggish sales in the domestic market and a projected decline in vehicle
exports to the U.S for inventory adjustment.
Operating Income
The company expects an operating income for the fiscal year of 70 billion
yen, down 18.2%. The projected decrease will result mainly from lower sales
in Japan and lower exports to the U.S., despite the positive factors such as
savings from streamlining efforts and foreign exchange profits.
Ordinary Income
The company projects an ordinary income for the fiscal year of 70 billion
yen, up 21.3%. Meanwhile, we project an increase of approximately 30 billion
yen in our net of non-operating income and expenses for the fiscal year, which
will accrue mainly from profits on the sale of marketable securities holdings.
Net Profit/Loss
Nissan expects to show a loss of 10 billion yen, marking a drop from last
year's results. Meanwhile, net of special gains and losses is expected to
decrease by approximately 40 billion yen ($296.3 million) compared with the
figure for the previous year. The decrease is projected in light of our
forecast that the marketable securities valuation loss incurred in the first
half is likely to remain in the second half.
Commenting on the company's financial performance, Mr. Kanemitsu Anraku,
managing director in charge of the accounting and finance group, made the
following statement:
"In May, Nissan unveiled its 'Global Business Reform Plan'. During the
first term, we steadily implemented measures set forth in the plan to
strengthen our financial position by cutting global inventories, selling
assets and continuing aggressive cost-cutting. Top management has pushed the
company to focus our attention and resources on our core key business areas.
"For the company's non-consolidated financial results for the first half,
we managed to secure an operating profit in line with our previously announced
earnings projection. The profit was achieved through the cost-cutting and
streamlining efforts and through gains from favorable foreign exchange rates
despite our reduced vehicle sales, which have been affected by the
steeper-than-expected fall in overall domestic demand.
"Although we initially expected to break even on a net basis, we showed a
loss of 32.5 billion yen, largely due to the heavy valuation loss suffered on
our marketable securities holdings that have been hit hard by the fall in the
stock market.
"Despite our ongoing success in global business reform, we project a
non-consolidated net loss of 10 billion yen for the current fiscal year ending
March 31, 1999 because some of the valuation loss on our marketable securities
holdings sustained in the first half are expected to remain in the second
half."
As part of the reform plan announced at the end of the last fiscal year,
Nissan recently announced major cost cutting plans including a comprehensive
plan to reduce development costs by cutting the number of platforms from more
than 24 to around seven by the year 2005. Additionally the company has
undertaken the task of streamlining sales channels in the domestic market and
has been pursuing a strategy to divest of non-core business assets.
Nissan North America
On a consolidated basis, Nissan has made significant improvements in U.S.,
operations. In the U.S., the company has cut excess inventories by more than
100,000 units, increased dealer profitability, dramatically improved its lease
portfolio, achieved its annual outside debt reduction target for the U.S. in
the first half of the fiscal year, and is preparing for a major infusion of
new product into its current and future lineup. Those new products include an
all-new Quest minivan, the Xterra SUV and the four-door Nissan Frontier pickup
truck. Other major additions to the lineup will include a facelifted
Pathfinder in January, an all-new flagship Maxima sedan next spring and an
all-new Infiniti I30 next summer.
Nissan has also been aggressive in cost-cutting in North America. The
company announced a program to cut more than $1,800 from the cost of bringing
each new vehicle to market over the next three years. Current projections put
the company ahead of schedule for that program.
In response to last year's consolidated loss, the company will complete
the merger of the parent company (Nissan North America, Inc.) and the sales
and marketing arm (Nissan Motor Co., U.S.A.) in January 1999. This move has
helped Nissan focus on integrating operations and become more responsive to
the business and market climates.
Regarding consolidated operations, Anraku added:
"Despite these reforms, the company's projection for consolidated
financial results for the current fiscal year call for an expected net loss of
30 billion yen. The projection is largely due to expected continuing
marketable securities valuation loss resulting from falls in share prices, the
adverse effect of a decrease in the value of the Mexican peso and other
factors."
Following is a summary of the statements released today
NISSAN MOTOR CO., LTD.
Non-Consolidated Financial Results
(For the first half of fiscal years
ending/ended March 31, 1999 and 1998)
(million yen) (million dollars)
Apr.-Sep. Apr.-Sep. Apr.-Sep.
1998 1997 1998 Change %
Net sales 1,638,584 1,776,101 12,138 (7.7)
Operating income(a) 20,607 50,511 153 (59.2)
Ordinary income(b) 28,844 45,356 214 (36.4)
Net income (32,548) 38,502 (241) --
Net income per share
(yen/dollar)(c) (12.95) 15.32 (.10) --
(a) After enterprise tax, which is accounted as "Income taxes" in the
corresponding statement in Nissan's annual report.
(b) Before special gains/losses and income taxes.
(c) Calculated based on the following average number of shares of common
stock outstanding during first half of fiscal years ending/ended
March 31, 1999 and 1998:
Apr. 1 - Sep. 30, 1998 --- 2,513,044 thousand shares
Apr. 1 - Sep. 30, 1997 --- 2,513,012 thousand shares
NISSAN MOTOR CO., LTD.
Dividends
Apr.-Sep. Apr.-Sep. Apr.-Sep.
1998 1997 1998
Interim dividends per
share (yen) 0.00 3.00 0.00
NISSAN MOTOR CO., LTD.
Financial Condition
(million yen) (million dollars)
September September September
30 30 30
1998 1997 1998
Total assets 3,638,129 3,202,368 26,949
Shareholders' equity 1,479,759 1,559,375 10,961
Equity ratio (%) 40.7 48.7 40.7
Shareholders' equity
per share* 588.83 620.52 4.36
* Yen/dollars - Computed based on the following number of shares of common
stock outstanding as of September 30, 1998 and 1997:
September 30, 1998 -- 2,513,044 thousand shares
September 30, 1997 -- 2,513,018 thousand shares
Note: Unrealized gain/ loss as of September 30, 1998:
Marketable Securities belonging to current and fixed assets:
110,067 million yen 815.3 million dollars
Derivative transaction:
12,131 million yen 89.9 million dollars
NISSAN MOTOR CO., LTD.
Forecast Of Fiscal Year Ending March 31, 1999
(Full-year, Apr. 1998 - Mar. 1999)
(million yen) (million dollars)
Net sales 3,400,000 25,185
Ordinary income 70,000 519
Net income (10,000) (74)
Cash dividends per share (yen/dollar) 5 0.04
NISSAN MOTOR CO., LTD.
Vehicle Production
(For the first half of fiscal years
ending/ended March 31, 1999 and 1998)
Apr.-Sep. Apr.-Sep.
1998 1997 Change (%)
Worldwide production (units) 1,230,590 1,378,322 (10.7)
Domestic 746,655 854,048 (12.6)
Overseas 483,935 524,274 (7.7)
NISSAN MOTOR CO., LTD.
Non-Consolidated Sales By Product Line
(For the first half of fiscal years
ending/ended March 31, 1999 and 1998)
Vehicle sales (units)
Apr.-Sep. Apr.-Sep.
1998 1997 Change (%)
Total vehicle sales 779,291 850,199 (8.3)
Domestic 434,754 492,737 (11.8)
Export 344,537 357,462 (3.6)
Passenger cars 670,017 727,508 (10.5)
Domestic 380,920 419,203 (13.6)
Export 289,097 308,305 (6.2)
Commercial vehicles 109,274 122,691 4.3
Domestic 53,834 73,534 (1.3)
Export 55,440 49,157 12.8
Net sales (millions of yen)
Apr.-Sep. Apr.-Sep. Apr.-Sep.
1998 1997 1998 Change %
Total net sales 1,638,584 1,776,101 12,138 (7.7)
Domestic 837,625 967,766 6,205 (13.4)
Export 800,959 808,335 5,933 (0.9)
Vehicles 1,287,758 1,416,066 9,539 (9.1)
Domestic 699,906 820,643 5,184 (14.7)
Export 587,852 595,422 4,354 (1.3)
Production parts
& components for
overseas production 120,697 134,315 894 (10.1)
Domestic -- -- -- --
Export 120,697 134,315 894 (10.1)
Automotive parts and others 195,275 187,318 1,446 4.2
Domestic 117,104 122,337 867 (4.3)
Export 78,170 64,981 579 20.3
Forklifts & marine equipment 23,217 25,814 172 (10.1)
Domestic 8,978 12,198 67 (26.4)
Export 14,239 13,616 105 4.6
Aerospace equipment 11,635 12,587 86 (7.6)
Domestic 11,635 12,587 86 (7.6)
Export -- -- -- --
Note 1: Yen amounts are translated into U.S. dollars for the convenience
of the reader only, at 135 yen = 1 dollar, the approximate
exchange rate on September 30, 1998.
Note 2: Negative numbers expressed parenthetically (0.00)