PARIS (AFP) – French carmaker Renault went into the red last year, the first time in a decade, with net losses of EUR141 million (USD152 million) due to lower sales and a falling contribution from its Japanese partner Nissan.
Renault said its outlook for 2020 was bleak with a fresh fall in operational profitability, a statement said yesterday.
Last year saw group operating margin drop from 6.3 per cent to 4.8 per cent, though Renault stated that it “achieved its targets, revised in October 2019,” despite “a troubled context.”
The auto giant in 2019 marked its first full year without former emblematic CEO Carlos Ghosn, arrested in Japan in November 2018 over allegations of financial misconduct, including under reporting salary and misuse of company assets at Renault partner Nissan.
Brazilian-born Ghosn, who also has French and Lebanese nationality, is now in Lebanon, where he fled in December 2019 after jumping bail in Japan.
In a struggling global auto market Renault saw group revenues slide 3.3 per cent to EUR55.5 billion while confirming sales dropped 3.4 per cent at 3.75 million vehicles.
Unveiling operating income down almost a third to EUR2.11 billion, the group said it expected 2020 to bring a further profitability hit, with revenues of a similar order to 2019.
“Visibility for 2020 remains limited by expected market volatility… and the possible impacts of the coronavirus,” said acting CEO Clotilde Delbos.
Renault also took a hit from a decline in the financial contribution of a likewise struggling Nissan, in which it has a 43 per cent stake, coming in at EUR242 million, down from EUR1.51 billion in 2018.
On Thursday, Nissan said its net profit plunged more than 87 per cent for the nine months to December 2019 as it struggles with weak demand and fallout from the Ghosn case.
Nissan also revised downwards its full-year sales and profit forecasts, but warned that the impact from the spreading coronavirus crisis was not yet included in their figures.
Yesterday’s results marked the first time Renault – which said it would slash its dividend by more than two thirds to EUR1.10 a share – had plunged into the red since 2009 in the throes of the financial crisis when it made a EUR3.1 billion loss.
Last year saw further upheavel, post-Ghosn, in the Renault hierarchy as director general Thierry Bollore was forced out. Delbos took the position on an interim basis but will give way to Italian Luca de Meo, most recently boss at Seat, Volkswagen’s Spanish subsidiary.
One of his first tasks will be to restore flagging investor confidence in the marque with Renault’s share price having slumped by around half over the past year to a 10-year low.