Nissan Motor (7201) Q1 2025 earnings summary

Executive summary

• Net revenue for Q1 rose 2.8% year-over-year to ¥2,998.4 billion, but operating profit plunged 99.2% to ¥1.0 billion and net income dropped 72.9% to ¥28.6 billion, reflecting significant margin compression and higher selling expenses amid increased competition.

• Global retail sales volume was nearly flat at 787,000 units, with declines in Japan and China, partially offset by growth in Europe and North America.

• Sales financing profits declined due to normalization of credit losses and higher funding costs, though liquidity and funding sources remain strong.

• Immediate actions are being taken to address inventory and profitability issues, focusing on new model launches and operational efficiency.

Financial highlights

• Operating profit margin fell from 4.4% to 0.0% year-over-year, with operating profit at ¥1.0 billion, down ¥127.6 billion from the previous year.

• Free cash flow in the automobile business was negative ¥302.8 billion.

• Net cash for the automotive segment declined to ¥1,403.8 billion as of June 30, 2024.

• CapEx accelerated to ¥100.8 billion and R&D to ¥147.9 billion in Q1.

• Gross profit fell to ¥401.3 billion from ¥497.7 billion year-over-year.

Outlook and guidance

• FY2024 net revenue guidance raised to ¥14,000 billion, but operating profit forecast cut by ¥100 billion to ¥500 billion and net income forecast reduced to ¥300 billion.

• Full-year unit sales forecast revised down to 3.65 million units, with China sales expected to decrease by 3.8%.

• FX assumptions revised to 155 USD/JPY and 167 EUR/JPY for Q2–Q4.

• Capital investment and R&D spending guidance unchanged; dividend forecast at ¥20 per share for FY2024.