Tokyo: Nissan issued a profit warning Wednesday, deepening the woes of the Japanese car giant as it seeks to recover from the shock of former boss Carlos Ghosn’s arrest. The company downgraded its projection for net profit in the fiscal year ending March 2019 from 410 billion yen ($3.7 billion) to 319 billion yen, the second cut in its forecast in recent months.
Nissan appeared to acknowledge the recent difficulties surrounding the Ghosn affair, which has cast questions over the company’s own corporate governance policy.
It cited as a reason for the downgrade as ‘the adverse operating environment facing the company during the fourth quarter, and the impact of recent corporate issues on sales’. Another reason was given as ‘additional expenses arising from the implementation of a warranty extension campaign covering certain vehicles sold in the US market’.
The profit warning came as ex-chairman Ghosn awaits his fate after prosecutors hit him with a fourth set of charges over alleged financial misconduct. Authorities suspect he syphoned off around USD five million for his personal use from money transferred from Nissan to a dealership in Oman.
Ghosn denies that charge and also insists he is innocent of all allegations against him. His lawyers have filed for bail which the Tokyo District Court is considering.
In February, Nissan already slashed its full-year forecast, as it revealed that nine-month net profit had dropped 45 percent – a decline the firm blamed on rising raw material costs and foreign exchange difficulties.
It was forced to downgrade its net profit forecast for the fiscal year to March to 410 billion yen, compared to 500 billion yen earlier.
Ghosn was ousted as head of Nissan and Mitsubishi Motors almost immediately after his arrest and later resigned as chairman and CEO of Renault.