- Nissan set to announce its biggest ever loss for the financial year just ended.
- It puts net losses at around $5 billion, against an earlier estimate of $561 m.
- Nissan abandoned merger talks with Honda and is restructuring the business.
How are your finances looking? Living on the overdraft? Couple of grand underwater on the credit card? It could be worse, you could be Nissan, which is about to announce a disastrous set of financial results that include a record net loss of around $5 billion for the fiscal year that ended March.
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Nissan won’t release the full earnings report until May 13, but has already confessed that it expects the books to show a net loss of ¥700-750 billion ($4.91-$5.26 billion) for the year to March, having previously predicted it would lose a way more modest, if not exactly confidence-inspiring ¥80, billion ($560 million). This would mark the biggest loss in the company’s history.
Related: Trump’s Tariffs Just Lit A Fire Under Nissan’s US Production Strategy
The automaker blames the big dive into the red on impairment charges, which is accounting speak for the reduction in the value of an asset on a company’s books. It has logged ¥500 billion ($3.5 billion) of charges for North America, Latin America, Europe and Japan, and says there’s ¥60 billion ($420 million) to add as a result of further restructuring costs.
Nissan is undergoing massive restructuring changes in an effort to keep itself afloat after $60 billion merger talks with Honda broke down. Though negotiations seemed to go well initially, they stalled in February, sources close to the manufacturers subsequently revealing that Nissan had come to the table thinking it would be an equal partner and balked when it realized Honda wanted to make Nissan a subsidiary.
Nissan has already announced 9,000 job losses, plant closures and streamlined model lineups in an effort to save more than $2.5 billion and is actively looking for a new partner, admitting that it will struggle to survive alone. Taiwanese tech giant Foxconn has expressed an interest in working with Nissan, but said it would rather team with the Japanese company than buy into it.
SWIPE
Although the merger talks with Honda and Mitsubishi collapsed, the three companies say they’ll continue to collaborate on electrification and software development as part of a broader effort to stay competitive in the EV race, particularly against Chinese rivals.
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