Nissan, in the face of slowing sales and management instability following the arrest of former chairman Carlos Ghosn, has seen its shares fall to a decade low after it slashed its full-year profit outlook and scrapped year-end dividend payout, Bloomberg reports.

Its shares fell 9.6% last Friday, with a market capitalisation of 2.17 trillion yen (RM81.8 billion), behind Subaru, Suzuki, Honda, and Toyota. In fact, Nissan’s stock is down 19% since the start of the year, after a 28% decline in 2019 and 22% in 2018. The company also revised its full-year operating profit forecast to 85 billion yen (RM3.2 billion), down from an initial estimate of 150 billion yen (RM5.65 billion).

To further combat plummeting profits, Nissan will cut 12,500 jobs globally in a bid to free up cash for investment in its next-generation technology. It hopes to stay competitive in areas such as electric vehicles and self-driving cars.

Company CEO Makoto Uchida said at a press conference: “Unfortunately, our business performance has worsened more than we anticipated, and there’s no letting up on investing in the future. In order to invest in growth, we ended up with this dividend.” Uchida took over the role as CEO in December 2019, and promised to unveil a new midterm plan this May for Nissan and its two-decade alliance with Renault.

Carlos Ghosn has predicted that Nissan will go bankrupt in 2-3 years

Meanwhile, in the latest three-month period, Nissan posted an operating profit of 23 billion yen (RM867 million), falling short of analysts’ average estimate of 59 billion yen (RM2.2 billion). Quarterly sales fell by 18% to 2.5 trillion yen (RM94.26 billion), missing analysts’ prediction of 2.7 trillion yen (RM101.8 billion).

Bloomberg Intelligence analyst Tatsuo Yoshida said: “There’s no magic potion. They’re going to have to make bold cutbacks in production.” Nissan’s core sales regions, which include China and North America, are slowing down. Profits in the latter fell by over 25% compared to a year ago.

Nissan COO Ashwani Gupta said he knows “exactly what the problem is,” and is confident that the US market will rebound. The company has planned to introduce eight new models US over the next two years, including replacements for the ageing Qashqai and X-Trail SUVs.

In China, Nissan had shut three of its factories due to the novel coronavirus outbreak. At least one of the factories have been reopened today, while the remaining two facilities will resume operations on February 20. Those plants have been closed since late January as part of the Chinese Lunar New Year celebration, and the extended closure is expected to have some impact on income and revenue in the current quarter.