Yahoo Finance Nissan shares hit lowest level in over a decade on profitability woes
Shares in Nissan (7201.T) on Friday plunged to their lowest level in more than a decade after the Japanese carmaker warned that its full-year operating profits would be the weakest in 11 years.
The carmaker on Thursday posted its first quarterly loss in nearly 10 years, and further slashed its dividend outlook by scrapping the end-of-year pay-out to investors.
Shares in the Tokyo-listed Nissan were down by more than 9.6% when markets closed in Japan.
The profit warning was the carmaker’s second in just three months, and comes as Nissan still reels from the 2018 ousting of disgraced former chairman Carlos Ghosn.
Read more: Nissan files $91m lawsuit against Carlos Ghosn
In the three months to the end of December, Nissan lost Japanese yen 26.1bn (£182m, $238m), its largest quarterly loss since 2009.
Between April and the end of the year, overall revenues fell 12.5% and operating profits plunged by 82.7%.
The company pointed to “weak performance and a slowdown in total industry volume,” and suggested that it would have to consider further cost reductions.
“We are making progress, but sales volumes have been weak so we need to do more restructuring than initially planned,” said newly installed chief executive Makoto Uchida said.
“The decline in sales and deterioration in earnings have exceeded our expectations,” Uchida said, noting that the company had “envisioned” profits bottoming out in 2019 ahead of growth in 2020.
“But it’s going to take more time,” he said.
Nissan this week became the first carmaker to suspend production at one of its domestic plants due to corona virus-related supply chain issues.
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The Japanese giant is also likely to be affected by the widely expected economic slowdown in China, since the country accounts for nearly 30% of its overall sales.
Nissan earlier this week filed a civil lawsuit in Japan against Ghosn, seeking damages of 10 million yen ($91m, £69.5m) for alleged financial misconduct.
Ghosn was arrested in Japan in 2018 over allegations of fraud, including misuse of company funds and understating his salary.
He was arrested and imprisoned in Japan, but jumped bail in December while under house arrest in Tokyo, and fled to Lebanon in a dramatic escape involving private planes routed through Istanbul.
