Motor manufacturer Nissan says it can “confidently plan” for the Sunderland plant’s future despite a massive drop in profits even before the difficulties of the coronavirus pandemic.
The Qashqai and Leaf maker has published accounts for the year ended March 2020 showing the extent of vehicle production decline pre-pandemic, with total production volumes falling by 22% to 325,000 vehicles, down from the previous year’s 415,000.
The accounts - which also cover Nissan Design Europe, in London, and Nissan Technical Centre Europe, in Cranfield – show turnover dropped 20% from £6.172bn to £4.923m, while the previous year’s pre-tax profit of £133m swung to a loss of £544m - down 509% - after being hit with an impairment charge of £425m.
The previous year’s operating profit of £114m also converted to a loss of £533m.
The firm said that, following a review of updated sales and profitability forecasts, the company had recognised the impairment charge against the value of its fixed assets.
The accounts also show the firm lost 903 staff in the year, with average headcount of 6,959 compared to 7,862 the year before.
The accounts only cover the start of the impact of Covid-19, but detail how the company has been affected, including a temporary halt to production.
The company said it furloughed employees where possible under the Government’s Job Retention Scheme, and benefited from support via the joint HM Treasury and Bank of England Covid Commercial Financing Facility (CCFF).
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The company received £600m of short-term cash funding in April 2020, repayable in March 2021, via the CCFF, to help with liquidity during the pandemic. Longer term financing of £600m was also secured in December 2020 through a five-year Export Financing Facility.
Accounts showed the company also received a capital injection of £341m from the Nissan group following the year end.
The accounts said: “Together with the financing raised since the end of March 2020, the clarity brought with the conclusion of Brexit and the agreement between the 海角视频 and EU means the company is now able to confidently plan for the future.“
A breakdown of production volumes showed it made 234,000 Qashqais, down on the previous year’s 289,000, Juke production was down 13,000 to 53,000, and Leaf production volumes were 37,000, compared to 46,000.
However, the year saw the Sunderland plant start production of the new model Juke in October 2019, and preparations were made for the new Qashqai model as part of a wider £400m investment.
The plant also saw the ten millionth vehicle roll off the production line in June, making it the fastest single site car factory in the 海角视频 to reach that figure.
Since the year end the company has been impacted by the worldwide shortage of computer chips, resulting in the firm furloughing 750 workers on production line two on at least two occasions.
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Commenting on the accounts, a Nissan spokesman said: “The accounts for Sunderland plant for the year ending March 31, 2020 reflect a challenging period for the business globally. Much of the reported loss was down to a one off charge to reduce the book value of the company’s fixed assets.
“A number of initiatives are ongoing, under the Nissan NEXT transformation, to restore the business to profitability, and the plant is now in an exciting period as it prepares for this summer’s launch of the third generation Nissan Qashqai.”
On the EEF loan it added: “This loan is supporting ongoing production and exports from our Sunderland Plant, including this summer’s launch of the third generation Nissan Qashqai, our best-selling vehicle in Europe.”