Panasonic posts US$1.17b FY net profit

Japanese electronics giant Panasonic on Monday booked its first annual net profit in three years and reversed a huge loss suffered in the previous 12 months as it presses on with a sweeping restructuring. In the period ended march, 31, the company reached 120 billion yen (US$1.17 billion) in net profit, after suffering a loss of 754.25 billion yen a year earlier, while revenue ticked up to 7.74 trillion yen from 7.30 trillion yen.

According to a statement released by the company, the operating profit increased significantly due mainly to expanding housing/automotive business and improving unprofitable business.

Consolidated group sales for fiscal 2014 increased by 6% to 7,736.5 billion yen from 7,303.0 billion yen in the year ended March 31, 2013 (fiscal 2013). Yen depreciation contributed to sales increase. Automotive related business grew in sales with global market recovering, and sales of housing related business increased by capturing demand before the consumption tax hike in Japan. Meantime, focusing on profitability rather than sales volume, sales in digital consumer-related business decreased. Of the consolidated group total, domes tic sales amounted to 3,897.9 billion yen, up by 3% from 3,790.4 billion yen and overseas sales increased by 9% to 3,838.6 billion yen from 3,512.6 billion yen.

"Despite some economic slowdown in emerging countries including India, the global economy moderately continued to recover with a pick-up in Europe, a continuing stock market recovery and the robust consumer spending in the US... yen depreciation and a surge in consumer spending before (a) Japanese consumption tax hike," it said in the statement.

Under such business circumstances, Panasonic launched its new mid-term management plan, “Cross-Value Innovation 2015 (CV2015)” in fiscal 2014. Under its new basic group formation through business division system, the company has been promoted four initiatives; eliminating unprofitable business, improving its financial position, expanding business and improving efficiency by shifting from in-house approach, and enhancing its growth strategy from customers' viewpoint. Under “Cross-Value Innovation,” beyond the existing frameworks and combining various and unique strengths in the Group, Panasonic has come to enable more value creation for customers.

Operating profit significantly increased by 90% to 305.1 billion yen from 160.9 billion yen a year ago due to improving unprofitable businesses. Implementing corporate-wide fixed cost reduction and streamlining of material cost also contributed to profitability. In other income (deductions), the business restructuring expenses of 207.4 billion yen including impairment losses of fixed assets were incurred.

A one-off gain of 79.8 billion yen from the pension scheme change and gain of 78.7 billion yen from transferring of healthcare business were also recorded. Accordingly, both pre-tax income and net income attributable to Panasonic Corporation turned profitable. Pre-tax income improved significantly to 206.2 billion yen from a loss of 398.4 billion yen, and net income attributable to Panasonic Corporation improved to 120.4 billion yen from a loss of 754.3 billion yen, respectively