Nissan Motor Co., Ltd. (NSANF.PK, NSANY.PK) has released its financial results for the first half of the fiscal year. On a TSE report basis, factoring in its China joint venture equity, the company reported a net income of 19.2 billion yen, a sharp decline from 296.2 billion yen in the prior year. The consolidated operating profit fell to 32.9 billion yen from 336.7 billion yen, resulting in a slim operating profit margin of 0.5%. Total consolidated net revenue also saw a decrease, slipping to 5.98 trillion yen from 6.06 trillion yen. Nissan attributed the contraction in profitability to the increased selling expenses and efforts in inventory optimization, especially in the US market, alongside rising costs in manufacturing processes, known as monozukuri costs.
Looking ahead, Nissan has adjusted its outlook for the fiscal year 2024. The revised forecasts now project net revenue of 12.7 trillion yen and an operating profit of 150 billion yen. This is a downward revision from previous estimates of 14.0 trillion yen in net revenue and 500 billion yen in operating profit. Consequently, the board has decided against providing an interim dividend for this period.
In response to these challenges, Nissan aims to slash costs by 300 billion yen in fixed expenditures and 100 billion yen in variable costs while sustaining healthy free cash flow. A strategic move to achieve these savings includes reducing global production capacity by 20% and cutting the global workforce by 9,000 employees. Furthermore, CEO Makoto Uchida has made the personal decision to forgo 50% of his monthly salary starting November 2024.
Additionally, Nissan announced its decision to divest up to 149,028,300 shares, representing approximately 10.02% of the total shares of Mitsubishi Motors Corporation (MMC). This move will reduce Nissan's existing stake in MMC from 34.07%.
