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Nissan Reports Major Losses Amid Restructuring Plan

Nissan's recent financial report reveals a stark shift with a large net loss for fiscal 2024. As part of their recovery strategy, Nissan aims for significant cost savings. Investors should closely monitor these developments as they indicate operational challenges ahead.

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AI Rating:   3
**Financial Overview:** Nissan Motor Co. has reported a substantial net loss of 670.9 billion yen for fiscal 2024, contrasting sharply from the previous year's profit of 426.6 billion yen. This downturn reflects a troubling trend in operational metrics as the full-year operating profit also diminished drastically to 69.8 billion yen, down from 568.7 billion yen. Moreover, the revenue figures also witnessed a slight decline, falling from 12.69 trillion yen to 12.63 trillion yen. These losses and declining revenues indicate a significantly weakened market position, probably affecting investor confidence in the short term. For the fourth quarter alone, the net loss reported was 676 billion yen, showing a marked contrast from a profit of 101.3 billion yen in the same quarter last year, further solidifying concerns regarding Nissan’s current financial health. The 4Q revenue stagnated at 3.49 trillion yen, a minimal drop from 3.51 trillion yen, emphasizing the strain the company faces. **Future Outlook:** Looking ahead, Nissan forecasts a net revenue of 12.5 trillion yen for the fiscal year ending March 31, 2026. However, the company has refrained from projecting guidance on operating profit, net income, and auto free cash flow, citing uncertainty related to the tariff environment. This lack of clear guidance may create a cautious atmosphere among shareholders and potential investors, as it raises concerns about the company’s recovery trajectory. **Recovery Strategy:** Nissan has announced the Re:Nissan initiative, aiming for total cost savings of 500 billion yen against fiscal 2024 actuals in both fixed and variable costs. As part of this recovery plan, the company plans to reduce workforce by 20,000 employees by fiscal 2027, which includes the previously discussed reduction of 9,000 positions. Such a significant reduction in workforce is both a drastic and sensitive measure that suggests deep cuts to stabilize the company in the short term. Additionally, consolidating vehicle production plants from 17 to 10 by fiscal 2027 signals an attempt to enhance efficiency but also highlights the tough challenges Nissan faces going forward. Overall, income metrics such as net income, revenue growth, and ongoing operating profit are greatly compromised, leading to a cautious investment outlook for Nissan.
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