Crisis-hit carmaker Nissan said Tuesday it had trimmed its annual net loss but warned its outlook remained clouded by the global chip shortage that has hit the auto industry.

The firm has faced a series of trials, from weak demand during the pandemic to the fallout from the arrest of former boss Carlos Ghosn, now an international fugitive after jumping bail and fleeing Japan.

Nissan narrowed its net loss to ¥448.7 billion ($4.1 billion) for the fiscal year to March, from a loss of ¥671.2 billion a year earlier, beating its own forecast.

“We are facing big business risks such as the semiconductor supply shortage and a surge in raw material costs,” CEO Makoto Uchida told reporters.

“We expect to face the impact mainly in the first quarter,” he said, adding that the company would continue to invest in sectors including research and development.

For the current year, Nissan expects to stay in the red but move closer to profitability, projecting a net loss of ¥60 billion.

The firm also forecast stronger sales for the current fiscal year, steadily recovering from the impact of virus lockdowns.

Even as vaccine rollouts put the end of the pandemic within sight for the hard-hit auto sector, it is battling a chip shortage driven by a surge in demand for electronic devices during lockdowns.

Supply disruptions including a fire at a Japanese factory, an extreme cold snap in the United States and a drought in Taiwan have compounded the mismatch between demand and availability.

Semiconductors are a key component in modern cars and the shortage has prompted Nissan to reduce production at home and furlough around 800 workers in Britain, Japanese media reports said.

Nissan has said its production has been affected but declined to provide details.

“Semiconductor supplies are expected to remain tight for now, because the global economic recovery from the coronavirus pandemic should further boost chip demand in many sectors,” said Yasuo Imanaka, chief analyst at Rakuten Securities.

“Nissan is on the path to recovery,” Satoru Takada, an auto analyst at Tokyo-based research and consulting firm TIW, said before the results were released. “But the semiconductor shortage and growing shipping costs could pour cold water on its recovery.”

The group’s strategy of trying to cut sales incentives, which tend to squeeze overall profit, has paid off, Takada said.

Sales fell 20.4% to ¥7.9 trillion in the 2020-21 business year but are forecast to rise to ¥9.1 trillion in the current fiscal year.

Nissan’s recovery has been slower than that of its rivals, as the firm struggled with growing sales costs and the ongoing saga surrounding fallen auto titan Ghosn.

Ghosn was detained in Japan in 2018, accused of financial misconduct charges that he denies. He jumped bail and fled to Lebanon the following year.

He remains at large, but his one-time associate Greg Kelly and Nissan itself are facing court proceedings in Japan.

The drama served to underscore longstanding tensions in Nissan’s alliance with Mitsubishi Motors and France’s Renault.

Ghosn has said his arrest was orchestrated by Nissan executives opposed to his plans to more closely integrate the Japanese firm with its French partner.

After a rocky period, the alliance partners agreed last year to a joint transformation plan, with each member taking the lead in a specific market.

Shares of Nissan jumped more than 50% over the past 12 months but closed down 0.65% on Tuesday ahead of the earnings announcement.

Toyota, which overtook Volkswagen last year as the world’s biggest-selling automaker, releases its earnings Wednesday.

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