TOKYO - Nissan Motor Co. lost a stunning $3.2 billion on a group basis for the six months ending Sept. 30.
Analysts generally applauded.
The loss came as Japan's troubled No. 2 carmaker paid off all its past pension liabilities, changed its accounting for warranty costs and took a little less than half the charges it will have to swallow for its restructuring program.
'We are clearing the past to pave the way for the future,' said Thierry Moulonguet, deputy CFO.
'I think it's admirable,' said Stephen Usher, Tokyo-based auto analyst for Jardine Fleming Securities (Asia) Ltd., referring to the charges, which totaled $2.6 billion for the pension costs alone. The rest of the restructuring charges will be taken in the second half of the fiscal year.
'The amazing thing is the operating profit,' he added. 'Nissan's forecast has hardly changed, despite the yen.'
As the yen strengthens against the dollar, Japanese carmakers book lower yen profits on their dollar income from sales abroad. For the year, Nissan expects currency losses to total $1.5 billion.
Yet, Nissan's cost-cutting and debt-reduction program will leave it with operating profits of $841 million, just a shade lower than the $935 million predicted last May.
For the first time ever, Nissan released its results on a consolidated, or group, basis. Previously, first-half results covered only the parent company. It did not provide year-earlier figures for comparison. But in the full year ending March 31, 1998, Nissan's group loss was $259 million, about one-twelfth the loss in the latest six months.
For the current full fiscal year, Nissan predicted a group net loss of $5.5 billion, slightly more than the $5 billion that Renault SA paid to acquire a controlling 36.8 percent stake in Nissan.
Renault issued a statement saying that Nissan's loss 'will have no additional impact on Renault's financial results' beyond those previously announced.
The first-half loss was the largest ever suffered by a nonfinancial company in Japan. The full-year projected loss, however, will not be as bad as the $23.5 billion that General Motors lost in 1992.