Nissan shares rose nearly 2% on Friday, a day after the Japanese automaker warned of a record annual loss driven by massive asset writedowns and restructuring charges.
The Japanese carmaker said the “impairments and restructuring costs [are] necessary for effective turnaround initiatives.”
The company sharply downgraded its financial outlook on Thursday, projecting a net loss of ¥750 billion to ¥800 billion ($5.2 billion–$5.6 billion) for the fiscal year ended March 31 — the largest annual deficit in Nissan’s history.
Nissan cited “changes in the competitive environment and deterioration in sales performance” as key reasons for the revised forecast.
The warning comes just months after Nissan slashed its outlook for fiscal 2024 in February, marking the third downward revision that year. At the time, the company also unveiled a management shakeup, saying it would reduce top executive positions by 20% starting in April, and announced cost cuts totaling about ¥400 billion ($2.5 billion) by fiscal 2026.
The automaker now expects full-year sales volume to total 3.35 million units. It lowered its operating profit forecast to ¥85 billion ($590 million), roughly 30% below its previous guidance, while full-year net revenue is projected at ¥12.6 trillion ($87.5 billion).
CEO Ivan Espinosa said the company is taking a “prudent step” by revising its guidance.
“We now anticipate a significant net loss for the year, due primarily to a major asset impairment and restructuring costs as we continue to stabilize the company,” he said.
Nissan booked asset impairment charges of more than ¥500 billion ($3.5 billion) across North America, Latin America, Europe, and Japan, and recorded additional restructuring costs exceeding ¥60 billion ($420 million).
In February, Nissan and Honda did not reach an agreement during the merger talks. Sources told Reuters back then that the cause was Honda’s proposal “to make Nissan a subsidiary.”
However, Espinosa said earlier this month that he remains “very open” to collaborations and that conversations with Honda are still happening.
