Nissan Motor Co., Ltd. today announced financial results for the six-month period to Sept. 30, 2018.
In the first half, the company’s net revenue fell 2.1% to 5.53 trillion yen. Operating profit fell 25.4% to 210.3 billion yen, equivalent to an operating profit margin of 3.8%. This was largely due to a planned decrease in wholesale volume as part of the company’s ongoing efforts to reduce dealer inventory levels and improve the quality of sales. Thanks to the strength of Nissan’s operations in China, net income1 fell less steeply, declining 10.9% to 246.3 billion yen.
The company’s overall operations improved steadily in the first half despite consistently challenging market conditions. Optimization of global dealer inventory levels is ongoing, and to that end, planned adjustments were made to wholesale volumes in the second quarter. This resulted in a decrease in revenue, although retail sales volumes remained essentially the same as the previous year.
On a regional basis, substantial progress was made in improving the quality of sales by reducing inventories and optimizing incentive levels in the U.S. market. Sales in Japan recovered from the impact of last year’s final vehicle inspection issue. Meanwhile, sales volumes in Thailand, the Philippines and Latin America, in particular, increased substantially. The company’s operations in China also performed well during the period. Nissan will continue efforts to strengthen its business, with the aim of ensuring that performance recovers in the second half.
First-half financial highlights
The following table summarizes Nissan’s financial results for the six-month period to Sept. 30, 2018, calculated under the equity accounting method for the group’s China joint venture.
(TSE report basis – China JV equity basis)2
(billions of yen)
(billions of yen)
(vs. year earlier)
|Operating margin %||5.0||3.8||-1.2 ppt|
On a management pro forma basis, which includes the proportionate consolidation of results from Nissan’s joint venture operation in China, operating profit was 306.7 billion yen, equivalent to an operating margin of 4.9%. Net income1 was 246.3 billion yen.
For the six-month period to Sept. 30, 2018, Nissan’s global vehicle sales fell 1.8% to 2.68 million units. This was equivalent to a global market share of 5.8%, down 0.2 percentage point from a year earlier.
In Japan, Nissan’s sales rose 0.5% to 285,000 vehicles, equivalent to a market share of 11.5%, up 0.1 percentage point from a year earlier, even as Japan’s total industry volume remained little changed at 2.48 million vehicles. Minivehicle model changeovers partly impacted sales figures. However, sales increased from a year earlier thanks to strong demand for models that embody the company’s Nissan Intelligent Mobility vision, including the new Nissan LEAF electric vehicle, the Serena e-POWER minivan, which went on sale in March, and the Nissan Note compact car, which led registered vehicle sales in Japan in the first half of the fiscal year.
In China, where Nissan reports figures by calendar year, vehicle sales rose 10.7% to 720,000 units, representing a market share of 5.4%, up 0.2 percentage point from a year earlier. Strong demand for models including the Nissan Sylphy, X-Trail and Kicks, as well as the Venucia D60, drove the increase.
In the U.S., Nissan’s sales fell 9.1% to 709,000 vehicles, equivalent to a market share of 8.1%.
Nissan sales in Europe, including Russia, fell by 12.1% to 330,000 vehicles, equivalent to a market share of 3.4%. Sales in Russia increased 2.4% to 50,000, equivalent to a market share of 5.6%.
In other markets, including Asia and Oceania, Latin America, the Middle East and Africa, Nissan’s sales rose 4.3% to 407,000 vehicles. Specifically, sales volume increased substantially in Thailand, the Philippines and Brazil.
1 Net income attributable to owners of the parent
2 Since the beginning of fiscal year 2013, Nissan has reported figures calculated under the equity method accounting for its joint venture with Dongfeng in China. Although net income reporting remains unchanged under this accounting method, the equity-accounting income statements no longer include Dong-Feng-Nissan’s results in revenues and operating profit.
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