Nissan's half-year loss widens three-fold on restructuring

Nissan Motor Co., an affiliate of France's Renault SA, said on Monday that its losses for the six months through September widened three-fold on one-time charges related to accounting changes and the company's reorganization plan.

Nissan Motor Co., an affiliate of France's Renault SA, said on Monday that its losses for the six months through September widened three-fold on one-time charges related to accounting changes and the company's reorganization plan.

Japan's second-largest automaker posted a group net loss of 325.5 billion yen (dlrs 3.05 billion), compared with a loss of 105.4 billion yen (dlrs 994.3 million) in the same period a year ago.

Sales fell 9.9 percent, to 3.045 trillion yen (dlrs 28.73 billion) from 3.382 trillion yen (dlrs 32 billion) in the April-September period the previous year.

The loss comes a month after Carlos Ghosn, the former Renault executive named Nissan's chief operating officer in June, announced plans to close three assembly plants in Japan and cut 21,000 jobs worldwide. It's part of a plan to restore the maker of Infiniti luxury vehicles to profitability in two years.

"I knew it was going to be big, but I didn't expect it to be this big," said Steve Usher, an auto analyst at Jardine Fleming Securities (Asia) Ltd. "If the company follows through with its commitment, I don't think it's a problem."

Group operating profit more than doubled to 58.5 billion yen (dlrs 551.8 million) from 25.9 billion yen (dlrs 245.13 million) in the year-ago period as cost-cutting offset a decline in domestic vehicles sales and the effects of the rising yen.

A stronger yen makes Nissan's vehicles more expensive overseas and hurts yen-based profits.

While Nissan made money on its operations, it was the one-time charges that dragged it into the red in the first half of the fiscal year, which ended on Sept. 30.

Nissan took a 368.9 billion yen (dlrs 3.48 billion) charge related to changes in the accounting of pensions and retirement benefits and provisions for the plant closures, the company said.

Ghosn warned last month that Nissan will show a larger loss this year than had been forecast because of the restructuring program.

On Monday, Nissan forecast a group net loss of 590 billion yen (dlrs 5.6 billion) for this fiscal year through March, its seventh loss in eight years.

The debt-ridden Japanese automaker undertook a campaign to remake itself after Renault SA of France bought a 36.8 percent stake for dlrs 5.4 billion earlier this year.

Once a trendsetter with such cars as the Datsun 240Z, Nissan in the last decade has been known more for bland design.

Renault anticipated Nissan's extraordinary losses when it calculated the value of its stake and it will not affect Renault's earnings, the company said.