Nissan shares fell 9.6 per cent to a decade low after the company cut its full-year profit outlook and scrapped its year-end dividend payout, slipping to fifth place by market value among Japan’s automakers.
Nissan shares fell to their lowest since 2009 in Tokyo on Friday, leaving the company with a market capitalization of 2.17 trillion yen ($19.8 billion), behind Subaru, Suzuki, Honda and Toyota.
Nissan’s stock is down 19 per cent since the start of the year, after declining 28 per cent in 2019 and 22 per cent in 2018.
Dogged by falling sales in the U.S., Japan and Europe, as well as instability in its most senior management ranks following the arrest of former Chairman Carlos Ghosn, Nissan reduced its full-year operating profit forecast to 85 billion yen, down from an earlier estimate of 150 billion yen.
The shares of Renault, which owns 43 per cent of Nissan and relies on dividends from the Japanese company, were mostly unchanged in Paris after the Renault posted a loss for 2019.
By slashing its dividend payment to the lowest level since 2011 and pursuing a previously announced plan to cut 12,500 jobs globally, Nissan is trying to free up cash for investment in next-generation technology needed to stay competitive in areas such as electric vehicles and self-driving cars.
“Unfortunately, our business performance has worsened more than we anticipated, and there’s no letting up on investing in the future,” CEO Makoto Uchida said at a press conference at the company’s Yokohama headquarters. “In order to invest in growth, we ended up with this dividend.”
The results and outlook underscore the challenges facing Uchida, who took over as CEO in December and promised to unveil a revised midterm plan in May for Nissan and its two-decade alliance with France’s Renault, which has itself recently appointed a new CEO.
(Automotive News)
