Nissan Motor Co. issued an outlook for a wider-than-projected operating loss for the current fiscal year, as the impact from the coronavirus pandemic forces the automaker to accelerate cost-cutting measures.
The operating loss for the year to March will be 470 billion yen ($4.5 billion), compared with analysts’ average prediction for a 216 billion-yen loss and a 40.5 billion-yen loss for the prior year. The Yokohama-based company also plans to skip its dividend, it said in astatement Tuesday.
The Japanese carmaker is struggling to restore profitability and sales afterreporting its biggest loss in two decades. Nissan has been mired in turmoil since the 2018 arrest of former Chairman Carlos Ghosn, who had pushed for volume growth. The company is seeking to revive an aging lineup and cut costs in an effort to improve margins and bring more cash into operations.
“Of course they’ll cut costs, but we have to look at if that’s really effective,” said Bloomberg Intelligence analyst Tatsuo Yoshida. “It would be meaningless if the cuts are only effective in the short term. I’m interested in how sustainable and meaningful the cost cuts are.”
Nissan reported a 154 billion-yen operating loss for the April-June quarter, compared with analysts’ prediction for a loss of 253 billion yen, as the automaker stepped up cost cuts to make it through a pandemic-induced drop in sales. Revenue fell 51% to 1.17 trillion yen in the April-June quarter, when most major economies went into lockdown to slow the spread of the Covid-19 virus.
The halt in dividend payouts is a blow toRenault SA, the Japanese carmaker’s biggest shareholder with a 43% stake and its partner in a global automaking alliance.
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