Crisis-hit Nissan issues fresh profit warning

Nissan downgraded its projection for net profit in the fiscal year to March 2019 from ¥410 billion ($3.7 billion) to ¥319 billion. (AFP)
Updated 24 April 2019

Crisis-hit Nissan issues fresh profit warning

  • The firm downgraded its projection for net profit in the fiscal year to March 2019
  • This is the second cut in Nissan’s forecast in recent months

TOKYO: Nissan issued a profit warning on Wednesday, deepening the woes of the Japanese car giant as it seeks to recover from the shock of former boss Carlos Ghosn’s arrest.
The firm downgraded its projection for net profit in the fiscal year to March 2019 from ¥410 billion ($3.7 billion) to ¥319 billion, the second cut in its forecast in recent months.
Nissan appeared to acknowledge the recent difficulties surrounding the Ghosn affair, which has cast questions over the company’s own corporate governance.
It cited as a reason for the downgrade “the adverse operating environment facing the company during the fourth quarter, and the impact of recent corporate issues on sales.”
The profit warning came as ex-chairman Ghosn awaits his fate after prosecutors hit him with a fourth set of charges over alleged financial misconduct.
Authorities suspect he syphoned off around $5 million for his personal use from money transferred from Nissan to a dealership in Oman.
Ghosn denies that charge and also insists he is innocent of all allegations against him.
In February, Nissan already slashed its full-year forecast, as it revealed that nine-month net profit had dropped 45 percent — a decline the firm blamed on rising raw material costs and foreign exchange difficulties.
It was forced to downgrade its net profit forecast for the fiscal year to March to ¥410 billion, compared to ¥500 billion earlier.
The results came as Nissan and its partners Renault and Mitsubishi Motors are seeking to turn the page on Ghosn’s arrest for financial misconduct, which has exposed a rift in the three-way tie-up.


Oil prices surge after attacks hit Saudi output

Updated 16 September 2019

Oil prices surge after attacks hit Saudi output

  • The Houthi attacks hit two Aramco sites and effectively shut down six percent of the global oil supply
  • President Donald Trump said Sunday the US was ‘locked and loaded’ to respond to the attacks

HONG KONG: Oil prices saw a record surge Monday after attacks on two Saudi facilities slashed output in the world’s top producer by half, fueling fresh geopolitical fears as Donald Trump blamed Iran and raised the possibility of a military strike on the country.
Brent futures surged $12 in the first few minutes of business — the most in dollar terms since they were launched in 1988 and representing a jump of nearly 20 percent — while WTI jumped more than $8, or 15 percent.
Both contracts pared the gains but were both still more than 10 percent up.
The attack by Tehran-backed Houthi militia in neighboring Yemen, where a Saudi-led coalition is bogged down in a five-year war, hit two sites owned by state-run giant Aramco and effectively shut down six percent of the global oil supply.
Trump said Sunday the US was “locked and loaded” to respond to the attack, while Secretary of State Mike Pompeo said: “The United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression.”
Tehran denies the accusations but the news revived fears of a conflict in the tinderbox Middle East after a series of attacks on oil tankers earlier this year that were also blamed on Iran.
“Tensions in the Middle East are rising quickly, meaning this story will continue to reverberate this week even after the knee-jerk panic in oil markets this morning,” said Jeffrey Halley, senior market analyst at OANDA.
Trump authorized the release of US supplies from its Strategic Petroleum Reserve, while Aramco said more than half of the five million barrels of production lost will be restored by tomorrow.
But the strikes raise concerns about the security of supplies from the world’s biggest producer.
Oil prices had dropped last week after news that Trump had fired his anti-Iran hawkish national security adviser John Bolton, which was seen as paving the way for an easing of tensions in the region.
“One thing we can say with confidence is that if part of the reason for last week’s fall in oil and improvement in geopolitical risk sentiment was the news of John Bolton’s sacking ... and thoughts this was a precursor to some form of rapprochement between Trump and Iran, then it is no longer valid,” said Ray Attrill at National Australia Bank.