ID :
60631
Thu, 05/14/2009 - 21:42
Auther :
Shortlink :
https://oananews.org//node/60631
The shortlink copeid
Sony logs biggest loss of 227.78 bil. yen in FY 2008, sees red this yr+
TOKYO, May 14 Kyodo - Sony Corp. on Thursday announced its biggest-ever group operating loss of 227.78 billion yen for fiscal 2008 ended in March and projected that sliding demand for its consumer electronics products will keep the company in the red for a second consecutive year.
For the business year ended in March, Sony's group net balance sank into the
red for the first time in 14 years as its record-high fiscal 2007 group net
profit of 369.44 billion yen was wiped out by a net loss of 98.94 billion yen.
The figure, however, was smaller than its earlier forecast of a loss of 150
billion yen.
Sony outlined further its restructuring program, saying it would end
manufacturing at three more plants in Japan, one in Mexico and another in
Indonesia by the end of this year, hinting that a reduction in its head count
may lie ahead.
The company is anticipating a smaller group operating loss of 110 billion yen
in fiscal 2009, but it is the first Japanese electronics giant to project
red-ink figures on an operating level for the current business year. The
operating balance is more reflective of the performance of its core businesses.
Other competitors like Toshiba Corp. and Hitachi Ltd. have also forecast annual
losses for the year, but on a net balance level.
Sony said it is also expecting a group net loss of 120 billion yen for the
current business year with restructuring costs of around 110 billion yen
expected to weigh heavily on its earnings. Sales are expected to fall 6 percent
to 7.3 trillion yen.
''We have made these forecasts on the assumption that tough business conditions
caused by the global economic recession will continue,'' Nobuyuki Oneda, the
company's chief financial officer, said at a press briefing in Tokyo.
Like many Japanese manufacturers that generate a major part of their revenues
overseas, Sony said its earnings were hammered by a stronger yen as well as an
erosion of gadget prices brought on by fierce global competition.
In fiscal 2008, the foreign exchange rate averaged 99.5 yen per U.S. dollar, up
13.8 percent from the previous year, and 142.0 yen per euro, up 12.7 percent.
Pressure from the yen's appreciation is expected to continue as Sony is
anticipating 95 yen per dollar and 125 yen per euro in the current business
year.
Sales slid 12.9 percent from the previous year to 7.73 trillion yen as consumer
demand for its Cyber-shot digital cameras and Vaio personal computers dwindled
on the back of the global economic recession.
Its TV division remained mired in the red for the fifth consecutive year with
an operating loss of 127 billion yen on sales of 1.27 trillion yen, down 7
percent from the previous year.
While sales of its Bravia liquid crystal display TVs in fiscal 2008 jumped 43
percent to 15.2 million units, revenues were hurt by an erosion of prices, Sony
said. It expects to sell 15 million units in fiscal 2009.
Oneda said Sony is aiming for its TV division to return to profitability by the
latter half of the current business year and to return to the black on an
annual basis by fiscal 2010.
The performance of its game division was also disappointing with sales dropping
18.0 percent from the previous year to 1.05 trillion yen.
But Sony, which is competing with Nintendo Co.'s smash-hit Wii console, expects
to sell 13 million units of its PlayStation 3 game console in fiscal 2009, up
nearly 30 percent.
To stem its losses, Sony has unveiled a wide-ranging restructuring program
including 16,000 job cuts globally, a 10 percent reduction of its global
manufacturing sites, consolidation of domestic TV production factories and pay
cuts. The measures will allow Sony to save over 300 billion yen in costs.
In addition to ending production at a plant in Ichinomiya, Aichi Prefecture,
Sony said it plans to end other manufacturing operations in Chiba, Shizuoka and
Iwate prefectures. It will also end production of LCD TVs in Mexico and
flexible flat cables in Indonesia, bringing the total number of manufacturing
plants to be closed globally to eight.
Sony said it is on track to cut 8,000 regular workers in its electronics
division through early retirement and other programs and has already ended the
contracts of more than 8,000 seasonal and temporary workers.
''We will carry out consolidation and termination of factories not only in
fiscal 2009, but also in fiscal years 2010 and 2011 so there will continue to
be more restructuring costs and reductions of expenses,'' Oneda said, adding a
reduction in its head count will be included in those efforts.
But analysts said Sony will need to do more to improve its cost structure by
outsourcing more of its TV production, a move Sony is considering but has yet
to outline in detail.
''The hard part is, they need to redo their cost base, particularly in Japan,''
said David Gibson, an analyst at Macquarie Securities Ltd. in Tokyo, adding
more assembly should be done abroad.
For fiscal 2008, Sony plans to pay a full-year dividend of 42.50 yen, compared
with 25.00 yen in fiscal 2007.
For the business year ended in March, Sony's group net balance sank into the
red for the first time in 14 years as its record-high fiscal 2007 group net
profit of 369.44 billion yen was wiped out by a net loss of 98.94 billion yen.
The figure, however, was smaller than its earlier forecast of a loss of 150
billion yen.
Sony outlined further its restructuring program, saying it would end
manufacturing at three more plants in Japan, one in Mexico and another in
Indonesia by the end of this year, hinting that a reduction in its head count
may lie ahead.
The company is anticipating a smaller group operating loss of 110 billion yen
in fiscal 2009, but it is the first Japanese electronics giant to project
red-ink figures on an operating level for the current business year. The
operating balance is more reflective of the performance of its core businesses.
Other competitors like Toshiba Corp. and Hitachi Ltd. have also forecast annual
losses for the year, but on a net balance level.
Sony said it is also expecting a group net loss of 120 billion yen for the
current business year with restructuring costs of around 110 billion yen
expected to weigh heavily on its earnings. Sales are expected to fall 6 percent
to 7.3 trillion yen.
''We have made these forecasts on the assumption that tough business conditions
caused by the global economic recession will continue,'' Nobuyuki Oneda, the
company's chief financial officer, said at a press briefing in Tokyo.
Like many Japanese manufacturers that generate a major part of their revenues
overseas, Sony said its earnings were hammered by a stronger yen as well as an
erosion of gadget prices brought on by fierce global competition.
In fiscal 2008, the foreign exchange rate averaged 99.5 yen per U.S. dollar, up
13.8 percent from the previous year, and 142.0 yen per euro, up 12.7 percent.
Pressure from the yen's appreciation is expected to continue as Sony is
anticipating 95 yen per dollar and 125 yen per euro in the current business
year.
Sales slid 12.9 percent from the previous year to 7.73 trillion yen as consumer
demand for its Cyber-shot digital cameras and Vaio personal computers dwindled
on the back of the global economic recession.
Its TV division remained mired in the red for the fifth consecutive year with
an operating loss of 127 billion yen on sales of 1.27 trillion yen, down 7
percent from the previous year.
While sales of its Bravia liquid crystal display TVs in fiscal 2008 jumped 43
percent to 15.2 million units, revenues were hurt by an erosion of prices, Sony
said. It expects to sell 15 million units in fiscal 2009.
Oneda said Sony is aiming for its TV division to return to profitability by the
latter half of the current business year and to return to the black on an
annual basis by fiscal 2010.
The performance of its game division was also disappointing with sales dropping
18.0 percent from the previous year to 1.05 trillion yen.
But Sony, which is competing with Nintendo Co.'s smash-hit Wii console, expects
to sell 13 million units of its PlayStation 3 game console in fiscal 2009, up
nearly 30 percent.
To stem its losses, Sony has unveiled a wide-ranging restructuring program
including 16,000 job cuts globally, a 10 percent reduction of its global
manufacturing sites, consolidation of domestic TV production factories and pay
cuts. The measures will allow Sony to save over 300 billion yen in costs.
In addition to ending production at a plant in Ichinomiya, Aichi Prefecture,
Sony said it plans to end other manufacturing operations in Chiba, Shizuoka and
Iwate prefectures. It will also end production of LCD TVs in Mexico and
flexible flat cables in Indonesia, bringing the total number of manufacturing
plants to be closed globally to eight.
Sony said it is on track to cut 8,000 regular workers in its electronics
division through early retirement and other programs and has already ended the
contracts of more than 8,000 seasonal and temporary workers.
''We will carry out consolidation and termination of factories not only in
fiscal 2009, but also in fiscal years 2010 and 2011 so there will continue to
be more restructuring costs and reductions of expenses,'' Oneda said, adding a
reduction in its head count will be included in those efforts.
But analysts said Sony will need to do more to improve its cost structure by
outsourcing more of its TV production, a move Sony is considering but has yet
to outline in detail.
''The hard part is, they need to redo their cost base, particularly in Japan,''
said David Gibson, an analyst at Macquarie Securities Ltd. in Tokyo, adding
more assembly should be done abroad.
For fiscal 2008, Sony plans to pay a full-year dividend of 42.50 yen, compared
with 25.00 yen in fiscal 2007.
