Renault slashed its annual dividend and reported full-year profit that missed estimates after sales declined and income from partner Nissan Motor dropped by 84 per cent.
Renault’s 2019 dividend will fall by more than two-thirds to €1.10 a share, it said on Friday.
The French carmaker owns 43 per cent of Nissan, which scrapped its own year-end payout to investors. Operating income at Renault dropped 30 per cent to €2.11 billion ($2.29 billion).
“We aren’t satisfied with our results,” acting chief executive officer Clotilde Delbos said in a presentation to analysts.
The decline comes after 15 months of upheaval at the French carmaker that began with the departure of chairman and chief executive Carlos Ghosn following his arrest in Japan on charges of financial wrongdoing.
Ghosn, who has denied the allegations, was facing trial in Japan until he made a dramatic escape to Lebanon at the end of December.
For 2020, the carmaker sees annual revenues in line with 2019, leaving aside currency swings, and a group operating margin of 3-4 per cent.
It forecasts positive automotive operating free cash flow before restructuring expenses, adding that expected volatility in Europe in light of new emissions rules and the potential impacts of the coronavirus cloud the outlook.
Renault lowered its guidance for 2019 revenue and profit in October, saying weakening economies weighed on car sales in key markets while tougher rules on emissions pushed up costs.
Nissan results
A deteriorating performance at Nissan has also hit results. Its contribution to Renault’s results plunged to €242 million last year from €1.51 billion the year before.
Nissan’s total dividend for its fiscal year ending in March is on track to be 10 yen (9 cents) a share, including an earlier interim payout. That compares with 57 yen the previous year.
Last month, Renault named former Volkswagen executive Luca de Meo as chief executive, starting in July.
He and chairman Jean-Dominique Senard will be charged with turning the page on a troubled era and shoring up Renault’s alliance with Nissan. Sorting out their differences is crucial as automakers face the costly and uncertain transition to electric vehicles.
Shares of each company have fallen by more than a third in the past 12 months, and both are trading at the lowest levels in about seven years.
Now the industry faces a challenge from the coronavirus. While Renault sells relatively few cars in China, it operates a factory with partner Dongfeng Motor in Wuhan, the city at the epicentre of the outbreak.
Its supply chain is also reliant on the country. Fiat Chrysler Automobiles said last week that it might have to temporarily close a European plant in the next few weeks if the impact from the outbreak worsens. – Bloomberg
