Nissan said its profits would be even worse this year

Tokyo (AFP) - Crisis-hit Japanese car company Nissan on Tuesday revealed net profits at a near-decade low as it battles to recover after the shock arrest of its talismanic former boss Carlos Ghosn.

Net profits for the fiscal year to March 2019 came in at 319 billion yen ($2.9 billion), the lowest amount since 200910 when the company was struggling in the wake of the global financial crisis.

It was a decline of 57 percent compared to the previous fiscal year and the profit outlook for the current fiscal year was forecast to be even worse – at 170 billion yen.

“The performance is a challenging one and we want to change this,” Chief Executive Officer Hiroto Saikawa told reporters.

The firm has been crippled by the reputational damage caused by the legal woes of former chairman Ghosn, who faces four formal charges of financial misconduct that he denies.

But analysts point to several problems for the Japanese firm beyond Ghosn, including apparently declining relations with its French partner Renault and a dearth of new products.

“They’ve got to let go of Carlos Ghosn, he’s out of the company, he’s no longer a director, they have to move beyond that, it’s a distraction,” said Christopher Richter, an analyst for the CLSA brokerage based in Tokyo.

Saikawa “has been in the top job for more than two years – that’s half of a model cycle – so I don’t think you can lay all the blame with Mr. Ghosn,” Richter told AFP.

He said Nissan has an “old and unattractive portfolio” and “desperately need new products”, the development of which has been delayed both by the difficulties surrounding Ghosn and the Renault-Nissan relationship.

- ‘Settling scores’ -

Nissan, along with Renault and Mitsubishi Motors, make up an unusual three-way alliance that has grown to become the top-selling car group.

Ghosn was the driving force between bringing the firms together and has since alleged that Nissan launched an investigation into him over fears he was hoping to merge the Japanese and French companies.

The appointment of new Renault boss Jean-Dominique Senard should open a “new chapter” in ties, said Saikawa earlier this year but the Japanese firm continues to resist anything approaching a merger.

Relations between the two firms appear to be worsening after a brief honeymoon following Senard’s appointment.

“A part of Nissan’s management is settling scores,” said a source close to Renault. “They are trying to pin the company’s bad performance on Ghosn.”

Renault executives feel betrayed, especially Senard, after media leaks of informal talks he thought had been friendly. “He is very angry, and that’s putting it mildly,” a source close to Renault said.

Another source close to the matter in Paris said: “With every day that passes, Senard is being humiliated a little more.” The source added: “Not only is the alliance not working, it has started to slide backwards and that is a threat to Renault.”

Renault’s management is at a loss to understand what Nissan is after. “The only thing that has never been leaked by Nissan is what they actually want,” quipped one Renault manager.

A spokesman for Renault contacted by AFP said the figures were “regrettable”.

“What is bad for Nissan is bad for Renault and vice-versa. And these results are not good news for the Alliance. These results reinforce the idea that we need changes,” the spokesman said.

“Joining forces is necessary to fight our competition which is not waiting around for us.”

Saikawa is also under pressure, with several shareholders demanding his departure at a meeting last month. His term is up for renewal at the end of June.

Ghosn was released on bail of $4.5 million last month under strict conditions, including restrictions on seeing his wife – which the tycoon described as “cruel and unnecessary”.

Local media have said that any trial of the former boss may not start until next year.

Ghosn denies all the charges against him and has vowed in several statements to “vigorously defend himself against these baseless accusations”.