Nissan took an $83 million charge related to the compensation of jailed former chairman Carlos Ghosn as the Japanese car maker reeling from the shock arrest of the executive warned of its lowest profit in six years. Japan’s third-largest car maker by market value slashed its operating profit forecast to ¥450 billion (Dh15.05bn), below the lowest of analysts’ estimates as sales in China and the US continue to wane. The charge taken against the 64-year-old’s payments are preliminary and may change depending on how the investigation into the alleged financial misconduct by Mr Ghosn proceeds. The industry titan was arrested on November 19 and has been in custody since then. Nissan posted a 25.4 per cent rise in quarterly operating profit on Tuesday as lower discounting in the United States helped the company improve profit in the key market, even as global sales decreased. The car maker posted a profit of ¥103.3bn for the third quarter ended December, compared with ¥82.4bn a year earlier. The result compared with an ¥116.49bn average of nine analyst estimates compiled by Refinitiv, according to Reuters. Pressure is growing on chief executive Hiroto Saikawa, who is trying to ease tensions with partner and shareholder Renault following Mr Ghosn’s arrest. The companies have spent the past two months coping with a major reputational hit from the scandal, indictments by Tokyo prosecutors over alleged financial improprieties and an unflattering spotlight on both companies’ corporate-governance controls. Tuesday’s earnings announcement is the first window for investors into the Yokohama, Japan-based car maker’s challenges since the Ghosn arrest, while the entire industry deals with complex issues such as the UK’s potentially jarring exit from the European Union and huge investments in electric and autonomous vehicles, Bloomberg said. Meanwhile, the management of the Japanese car maker and its French partner are focused on dealing with internal issues amid efforts by Nissan to rebalance the two-decade old relationship. “You could end up with an alliance with nobody in charge and achieve nothing going forward, and so it just becomes an alliance in name only at a critical time when technology is changing in the industry,” Christopher Richter, an analyst at CLSA, said before the results. The one-time charge of ¥9.2bn to reflect Mr Ghosn’s yet to be paid remuneration shows Nissan and Renault are set to feel reverberations from the scandal for a long time. Renault reports earnings in two days. The so-called deferred pay has emerged as a point of focus for Tokyo prosecutors who have indicted Mr Ghosn for allegedly understating his income at Nissan by tens of millions of dollars. Nissan lowered the volume forecast for vehicles it expects to sell this fiscal year to 5.6 million from 5.9 million, reducing its expectations for all major markets, including China, the US, Europe and Japan.
