Mitsubishi Motors revised FY2019-2020 forecast not good

Mitsubishi Motors revised FY2019-2020 forecast not good

KUALA LUMPUR: Mitsubishi Motors Corporation has made some revisions in its 2019 Fiscal Year financial forecast, and it doesn’t look good. Initially, the automaker predicted low performance in FY 2019-2020 than FY2018-2019 due to the global fall in demand prior to COVID-19, but after the pandemic, the figures dropped sharply even further.

As per the new forecast for FY2019-2020, the net sales will go down by 9.7%, operating profit to be lower by 89.2%, ordinary profit down to negative figures, and basic earnings per share to drop by -17.36 JPY. In FY2018-2019, each share earned investors around 89.26 JPY.

A little heads up, the Japanese automakers follow the Fiscal Year system wherein the companies calculate their performance from April 1 to March 31, i.e., FY2019-2020 is from April 1 to March 31, 2020, rather than a calendar year.

MMC pay cut

By this understanding, Mitsubishi Motors should have released final figures for FY2019-2020. But due to the COVID-19 pandemic, it has to shut down its offices for several key markets like the Philippines, Malaysia, and others, thus causing the delay in sourcing the full and final figures due to the unavailability of final audits.

In anticipation of low figures, the company has decided not to pay its shareholders the year-end dividend. The automaker said in a statement that it urgently needs to stabilize its financial base to restore profitability. In light of the matter, MMC executives have decided to bear a significant pay cut, which will also save the company from all the backlash from the shareholders.

Top Mitsubishi bosses - Corporate Officers, Representative Executive Officers, and Executive Officers will not get any performance-based compensation, and they will take a 20 to 30% reduction in salary. Non-Executive Directors will take a pay cut of 10 to 25%.

The pay reduction will be effective from the next Fiscal Year, i.e., FY 2020-2021.

Also, during Nissan’s last stockholder meeting, the company’s bosses were grilled for not being able to pay dividends, and they were blasted for not taking a pay cut. Well, it seems alliance member Mitsubishi has taken a good lesson from all the scolding Nissan received.

Also Read: VW reopens factory in Germany, restarts Golf production

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