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Renault SA slashed its annual dividend and reported full-year profit that missed estimates as sales declined and partner Nissan Motor Co. scrapped its year-end payout to shareholders.

Renault’s 2019 dividend will fall by more than two-thirds to 1.10 euros a share, the carmaker said Friday. Operating income dropped 30% to 2.11 billion euros ($2.29 billion) last year, missing analysts’ average estimate of 2.65 billion euros.

The decline comes after 15 months of upheaval at the French carmaker that began with the departure of Chairman and Chief Executive Officer 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 between 3% and 4%. 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.

Nissan Impact

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. A deteriorating performance at Nissan has also hit results. Its contribution to Renault’s results plunged to 242 million euros last year from 1.51 billion euros the year before.

Renault owns 43% of the Japanese carmaker and depends on dividends from Nissan to fund its own payouts to investors. Nissan’s total dividend for its current 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.

Read this: Nissan Is Worth Less Than Subaru After Shares Plummet

Last month, Renault named former Volkswagen AG executive Luca de Meo as CEO, 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.

Renault and Nissan shares have each dropped by more than a third in the past 12 months, and both companies are trading at the lowest levels in around seven years.

Sorting out their differences is crucial as automakers face the costly and uncertain transition to electric vehicles.

Now the industry is facing a fresh challenge: the coronavirus. While Renault sells relatively few cars in China, it operates a factory with partner Dongfeng Motor Co. in Wuhan, the city at the epicenter of the outbreak. Its supply chain is also reliant on the country. Fiat Chrysler Automobiles NV said last week that it may have to temporarily close a European plant in the next few weeks if the impact from the outbreak worsens.

Get more:

  • FY revenue 55.5 billion euros vs 55.4 billion-euro estimate
  • 2019 group operating margin 4.8%
  • 2019 positive automotive operational free cash flow 153 million euros

To contact the reporter on this story: Angelina Rascouet in Paris at arascouet1@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net, Frank Connelly

©2020 Bloomberg L.P.