SONY YESTERDAY forecast that its aggressive restructuring programme would help it break even at the operating level in the current year, although only if costs of 110 billion yen (€845 million) for that restructuring are stripped out.
Sony became the latest Japanese electronics company to forecast an improvement as it reported results for the year to March 2009 that beat its last most recent forecast in January, suggesting that the company has reaped some benefits from restructuring and recent weakness in the yen.
The full-year operating loss was Y228 billion – in which Sony includes a Y75.4 billion restructuring charge – against its previous prediction of Y260 billion. The net loss was Y99 billion versus a January forecast of Y150 billion, the group said.
“We are anticipating the severe operating environment brought on by the global economic slowdown to continue,” said Nobuyuki Oneda, Sony’s chief financial officer.
But Mr Oneda added that Sony expected its restructuring programme to improve profitability.
“In particular, we expect operating losses in the television business to contract significantly,” he said.
Sony also announced further sweeping changes to its domestic factory organisation.
Three of its nine remaining electronics plants in Japan – making digital cameras, small LCD panels and mobile phones – will close, with production moved to other sites.
Sony became a symbol of the effects of the financial crisis on the electronics industry, and the structural problems that made the industry vulnerable to losses, when it announced a sudden profits warning soon after the bankruptcy of Lehman Brothers last year.
Sales for the year to March 2009 were down by 13 per cent and Sony expects a further 6 per cent fall this year.
Profits were hit especially hard because Sony makes a relatively large part of its sales outside Japan, exposing it to weak US consumption and the strength of the yen.
In its video game business, Sony forecast a 29 per cent increase in sales of the Play-Station 3 console, from 10.06 million last year to 13 million this year.
Given the fall in PS3 sales since Microsoft cut the price of its rival Xbox 360, that will be taken as a clear signal that Sony intends a price cut of its own later this year.
Rival Sanyo Electric also reported yesterday, recording a net loss from continuing operations of Y122 billion, after Y85 billion of exceptional costs to restructure its lossmaking semiconductor business. – (Copyright The Financial TimesLimited 2009)
