Panasonic Forecasts $5.3 Billion Full-Year Loss
Japanese electronics giant Panasonic said Monday it expected to lose $5.3 billion this year as a strong yen and one-off charges would reverse an expected profit.
The company also said it would be shuttering plants and would shifting its procurement and logistics base to Singapore, marking the first time the company's headquarters operations are to be outside Japan.
An LCD factory east of Tokyo and one in Shanghai will close, while production at another site in Japan will be reduced.
The screens, which are used in televisions, will be sourced from a supplier, CEO Fumio Ohtsubo told reporters.
Panasonic has struggled to cope with the falling shelf prices of televisions and increased competition in the industry.
It has also been badly hit by the rocketing value of the yen, which has reached successive new post-war highs over recent months as investors seeking a safe haven from the global economic storm have flocked to the currency.
On Monday Japan intervened in currency markets for the first time since August to weaken the yen, sending the dollar as high as 79.49 after hitting 75.32 yen in Oceania trade earlier in the day.
The move also saw the euro rise sharply to 111.25 yen from 107.06 yen earlier Monday.
A high yen punishes Japanese exporters such as Panasonic by making their goods more expensive overseas and eroding repatriated profits.
The company said Monday it had lost 136.15 billion yen between April and September.
It also forecast a group net loss of 420 billion yen ($5.3 billion) for the year to March 2012, compared to a profit of 30 billion yen projected earlier due to re-organization and restructuring costs.
The first-half loss stemmed from declining sales, restructuring costs and the impact of the March 11 earthquake and tsunami, the company said.
The weaker outlook came "due primarily to the sluggish overseas sales affected by ever-intensified price competition for digital products and the appreciation of the yen," the company said in a statement.
The loss came against a net profit of 74.72 billion yen logged in the same period a year earlier.
Osaka-based Panasonic booked an operating profit of 47.60 billion yen, down 71.8 percent from the first half of fiscal 2010, and sales of 4.01 trillion yen, down 8.3 percent.
The company also revised down its full-year operating profit to 130 billion yen from 270 billion yen, while it now expects sales of 8.3 trillion yen compared to 8.7 trillion yen.
Panasonic also unveiled plans to transfer the headquarters of its procurement and logistics operations from Osaka to Singapore in a process starting in April 2012.
"The move is part of the company’s globalization efforts in line with its midterm management plan," it said
"The operational shift to Singapore allows Panasonic to globally optimize the use of parts and materials procured outside Japan, as well as to build a logistics system with Asia in the center of the operation."
Source: Agence France Presse
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