Nissan Motor Co posted a 25.4% rise in quarterly operating profit yesterday as lower discounting in the United States helped the Japanese automaker improve profit in the key market, even as global sales decreased.
Japan’s second-biggest automaker posted a profit of ¥103.3bn ($934.25million) for the third quarter ended December, compared with ¥82.4bn a year earlier. The result compared with a ¥116.49bn average of nine analyst estimates compiled by Refinitiv.
In its financial statement, Nissan said it had recognised ¥9.232bn in additional expense in salaries and wages which had not been booked in prior years. This reflected the more than $80mn in additional compensation related to its allegation that ousted chairman Carlos Ghosn had under-reported in salary, the company said. Ghosn, arrested and detained in Tokyo since November 19, has been indicted in Japan on charges of under-reporting his salary at Nissan over 2010-2018. He has denied the deferred pay was illegal or required disclosure, while not contesting the agreement’s existence.
Ghosn has also denied a separate breach of trust charge over personal investment losses he temporarily transferred to Nissan during the global financial crisis in 2008.
Nissan lowered its full-year profit forecast to ¥450bn from ¥540bn previously, based on the assumption that the yen will trade around 110.6 yen to the US dollar through March 31, from a previous forecast for 105 yen. Ghosn stands accused – among other things – of under-declaring some ¥9bn in salary between 2010 and 2018 and continues to languish in a Tokyo detention centre after being refused bail.
Nissan has announced the cancellation of plans to build its X-Trail SUV at its plant in northeast England despite Brexit assurances from the government. Global vehicle sales for Nissan fell 2.1% to 4mn for the nine-month period because of declines in North America and Europe.
However, sales for the nine months came in at ¥8.6tn, up 0.6% on-year.
Thyssenkrupp
Germany’s Thyssenkrupp yesterday posted a 26% plunge in first-quarter operating profit, and the steel-to-elevators group added that the global macroeconomic environment, a key driver of demand for its products, was darkening.
The group’s adjusted earnings before interest and tax (EBIT) came in at €333mn ($375mn), pulled down by a 77% slump in profit at its discontinued steel unit.
The conglomerate plans to merge the steel unit with the European operations of India’s Tata Steel.
Thyssenkrupp, which announced in September it would spin off its elevator, car parts and plant engineering business, said it still expects adjusted EBIT from continuing operations to rise to more than €1bn in 2018/19. “However, at the same time economic and political uncertainties are growing,” the company said. Fears of a global economic slowdown have increased in recent months, with eurozone businesses expanding at their weakest rate since mid-2013 at the start of the year as demand fell for the first time in four years.
Gucci
French luxury group Kering still has plenty of spring in its step despite cutting loose sneaker brand Puma, with Gucci grabbing the financial glamour with a profit margin nearing 40%.
With the Stella McCartney, Volcom and Christopher Kane brands also off the books, the group saw sales soar 26.3% to €13.66bn ($15.4bn) last year.
Meanwhile, net profits surged 49.3% to €2.8bn, in line expectations of analysts surveyed by Factset and Bloomberg. Chairman and chief executive officer Francois-Henri Pinault called 2018 “an excellent year for Kering”, noting that “once again, we significantly outperformed our sector”.
Operating profits hit a record €4.4bn, which is nearly double the level of two years ago, said chief financial officer Jean-Marc Duplaix.
Gucci was a main driver, with sales rising by a third to over €8bn and operating profits jumping 54% to nearly €3.3bn. That means over four euros out of ten brought in by the label is operating profit.
The Yves Saint Laurent label also posted strong sales growth of 16%, while Bottega Veneta sales slipped 3.6% as the house reboots with a new creative director.
The other houses unit, which includes brands such as Balenciaga and Alexander McQueen, posted a 43.6% increase in sales, while the eyewear unit also turned in a similar performance.
Kering distributed its holding in Puma to shareholders last year to focus on luxury brands, but the leaping-cat brand still brought in most of the nearly €1.1bn in profit from discontinued activities.
On a regional basis, North America booked the biggest growth in sales at 37%, followed by a 34% rise in the Asia-Pacific region.
Vontobel
Swiss private bank and asset manager Vontobel posted a 14% rise in adjusted full-year net profit and confirmed increased 2020 targets despite a challenging environment it expects this year.
“In a nutshell: Vontobel is on course,” chief executive Zeno Staub told journalists on a call yesterday, saying that recent acquisitions and a focused strategy set the bank up to capture further market share. Vontobel in July raised its 2020 profit targets on optimism that its 700mn franc acquisition of private banking rival Notenstein La Roche would boost results, even as larger peers warn that tepid client trading – which hit wealth managers hard in the second half of 2018 – could continue weighing on profitability.
TUI
TUI said yesterday its underlying loss had widened in its first quarter, days after the tour operator slashed its full-year forecasts due to an unusually long and hot summer in northern Europe.
TUI’s underlying loss was €83.6mn ($94.34mn) in the three months to December 31, widening from €36.7mn in the comparable period the previous year, and in line with the company’s expectations.
Chief executive Fritz Joussen said that the group was taking a hit on margins in order to protect its market share in a tough operating environment for travel firms. “Customers are buying, but they are buying at lower prices. That’s the reason why you see the margin degradation. It is all markets,” Joussen told reporters. “The market is challenging.”
Omnicom Group
US advertising company Omnicom Group Inc beat Wall Street estimates for fourth-quarter profit yesterday, as higher advertisement spending by businesses in Europe offset the impact of a strong dollar. Shares of the company, which initially rose more than 3%, reversed course to last trade 1% lower at $73.06. Omnicom also posted a 3.2% rise in organic revenue – a widely watched measure that excludes fluctuation in foreign exchange rates and mergers. Analysts on average had expected a 3.3% rise in organic revenue, according to research firm FactSet.
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