TOKYO - Nissan Motor Co., Ltd. announced financial results for the fiscal year ended March 31, 2000.

The company reported a consolidated operating profit of 82.6 billion Yen ($ 778.9 million, Euro 809.5 million) with net sales of 5,977.1 billion Yen ($ 56.39 billion, Euro 58.60 billion), which decreased 9.2% compared to the previous year and 10.5% on a consistent basis. Consolidated operating income was 1.4% of net sales on a consistent basis compared to 1.8% in fiscal year 1998 because of the impact of adverse changes in foreign exchange rates. The average exchange rate for the dollar came to 112 Yen in fiscal year 1999 compared to 128 Yen in fiscal year 1998. 

The company announced one-time extraordinary charges totalling 711.1 billion Yen ($ 6.71 billion, Euro 6.97 billion) leading to a consolidated net loss of 684.4 billion Yen ($ 6.46 billion, Euro 6.71 billion). 

The results published today close a year of transition for Nissan. After the conclusion of an alliance with Renault in March 1999, Nissan announced a comprehensive revival plan in October 1999.  With the necessary and expected clarification contained in the provisions reported below, Nissan is today on a fast track to returning to lasting profitable growth. 

Consolidated Financial Results:

1.      Unit Sales

Nissan's global vehicle sales of passenger cars and light commercial vehicles for the full year 1999 reached 2,415,000 units compared to 2,578,000 units on a consistent basis in fiscal year 1998. Domestic sales totalled 758,000 units, a drop of 13.2% from the prior year (873,000 units), sales in North America (USA and Canada) rose 11.1% to 730,000 units from 657,000 units in 1998 while Mexican unit sales were stable at 144,000 units compared to 145,000 units in 1998.  In Europe, sales decreased 8.9% to 501,000 units from 550,000 units the prior year. Other foreign markets totalled 282,000 units, down 20.1% from fiscal year 1998 (353,000 units).

2.      Net Sales

Consolidated net sales for the full year came to 5,977.1 billion Yen ($ 56.39 billion, Euro 58.60 billion), a drop of 10.5% on a consistent basis from 1998.  This fall is mainly due to the negative impact of the appreciation of the Yen, particularly in respect to the US$ and Euro and to the decline in total unit sales of 6.3% compared to fiscal year 1998.

3.      Operating Income

Consolidated operating income decreased 31.7% on a consistent basis to 82.6 billion Yen ($ 778.9 million, Euro 809.5 million) and represented 1.4% of sales as compared to 1.8% for fiscal year 1998. The decline in operating income is attributable to the negative impact of the appreciation of the Yen and to lower unit sales, in particular in the domestic market.  This impact was not fully offset by reductions in costs and selling and general administrative expenses. 

4.      Ordinary Income

Consolidated ordinary income came to a loss of 1.6 billion Yen ($ 15.5 million, Euro 16.1 million) compared to a profit of 30.1 billion Yen ($ 284.0 million, Euro 295.1 million) on a consistent basis in the prior year. This loss is the result of lower operating profits despite lower non-operating expenses such as interest on outstanding debt as a result of lower net automotive indebtedness. 

5.      Income before income taxes

Consolidated income before taxes reached a loss of 712.7 billion Yen ($ 6.72 billion, Euro 6.99 billion) compared to a loss of 59.6 billion Yen ($ 562.3 million, Euro 584.3 million) on a consistent basis in 1998. This loss is the result of extraordinary non-recurring charges of 711.1 billion Yen ($ 6.71 billion, Euro 6.97 billion) relating to the following items: 

i)  change in the accounting of pensions and retirement benefits reserve to cover service of all past retirement liabilities:  275.9 billion Yen
ii)  plant closures and expenses related to the Nissan Revival plan: 232.7 billion Yen.
iii)  new accounting methods including a change in the calculation of provisions relating to product warranties to bring the accounts in line with internationally accepted accounting practices, booking R & D expenses directly to the income statement which were previously amortized as well as provisions resulting form the change in the residual value of fixed assets in view of changing the depreciation method of plant, property and equipment in Japan from the declining balance to the straight line method to bring accounts in line with internationally accepted practices:  114.2 billion Yen
iv)  other provisions relating the values of real estate holdings and losses on investments: 88.3 billion Yen. 

6.      Income taxes

The company adopted tax effect accounting starting in the current reporting period. This change resulted in the recognition of 30.6 billion Yen ($ 288.6 million, Euro 299.9 million) of deferred tax benefits. The majority of the tax benefits have been deferred to future years.  Current income taxes amounted to 40.5 billion Yen ($ 382.1 million, Euro 397.1 million) giving a net tax impact of 9.9 billion Yen ($ 93.5 million, Euro 97.2 million) for the period compared to a charge of 26.1 billion Yen ($ 246.1 million, Euro 255.7 million) in 1998. 

7.      Net income

Consolidated net loss after tax reached 684.4 billion Yen ($ 6.46 billion, Euro 6.71 billion) compared to a loss of 28.5 billion Yen ($ 268.9 million, Euro 279.4 million) for the full year 1998 on a consistent basis. 

8.      Indebtedness and Financial Condition

Consolidated net financial indebtedness totalled 2,481.5 billion Yen ($ 23.41 billion, Euro 24.33 billion) at the end of the fiscal year. Consolidated net financial indebtedness of the automotive business reached 1,348.7 billion Yen ($ 12.72 billion, Euro 13.22 billion), down from 2,040.9 billion Yen ($ 19.25 billion, Euro 20.01 billion) on a consistent basis from the end of fiscal year 1998.  The net financial indebtedness of the sales finance companies reached 1,132.8 billion Yen ($ 10.69 billion, Euro 11.11 billion).  The decrease in total consolidated net financial indebtedness in fiscal year 1999 compared to fiscal year 1998 is due primarily to the capital injection of Renault, while a foreign exchange translation of 82.3 billion yen ($ 776 million, Euro 807 million) and other operating factors contributed to the drop. 

Consolidated shareholder's equity at the end of March 2000 totalled 929.4 billion Yen ($ 8.77 billion, Euro 9.11 billion), a decrease of 175.3 billion Yen ($ 1.65 billion, Euro 1.72 billion) compared to 1,104.7 billion Yen ($ 10.42 billion, Euro 10.83 billion) at the end of 1998 on a consistent basis. 

9.      Outlook

The outlook for fiscal year 2000 contains a number of economic and market risks.  In Japan, while overall economic activity may have stabilized, total demand for passenger cars and light commercial vehicles remains weak. Furthermore, the Yen and Pound Sterling may continue their adverse rise compared to the Euro thereby exerting downward pressure on operating margins. Finally, interest rates, which are rising in Europe and the United States, may begin to follow the same pattern in Japan. 

However, there are numerous opportunities for the new fiscal year. The Nissan Revival Plan which is now fully deployed in the company is having a faster and deeper impact than planned.  Nissan will also further leverage the Alliance with Renault in the areas of purchasing, platform co-development and international growth.  Finally, the dollar's level versus the Yen has been so far above fiscal year 2000's business plan assumption.

Nissan's financial forecast for the year shows an operating profit of 110 billion Yen, an ordinary profit of 40 billion Yen and a net profit of 60 billion Yen. 

(May 19, 2000)