Nissan debt rating cut by S&P on weaker earning prospects

Employees work on new Nissan Qashqai SUV on the production line in Sunderland. (Bloomberg pic)

SINGAPORE: Nissan Motor had its debt rating cut by S&P Global Ratings, which said the Japanese carmaker’s earnings will continue to experience downward pressure for as long as two years.

The company’s rating was lowered to A- from A, S&P said Thursday in a statement.

The outlook on the long-term rating is stable, S&P said.

Nissan cut its full-year earnings forecast this month after third-quarter profit missed analysts’ estimates, adding to the headwinds for the carmaker grappling with the aftermath of the shock arrest of iconic ex-chairman Carlos Ghosn.

Sales in the US are waning amid an industrywide slump, intensifying the pressures on Chief Executive Officer Hiroto Saikawa who is trying to ease tensions with a partner and shareholder Renault following Ghosn’s arrest.

“Given severe business circumstances in the automotive business, we believe the company will find it difficult to restore its weakened profitability over the next one to two years,” S&P said.

“It will take time to stabilise its management.”