Share

Moody's cuts Sony credit rating

Tokyo - Moody's on Friday downgraded Japanese electronics titan Sony, citing the company's "weak profitability and cash flow".

The agency lowered its assessment on debt issued by Sony from Baa1 to Baa2, citing "its challenges in achieving profitability in the TV and mobile phone segments, and the erosion in its global competitive position across different product lines".

The rating agency also said: "Weak consumer sentiment, fierce global competition, and the impact of the strong yen on cost competitiveness will further hamper its efforts to improve its metrics."

Sony, the once-world-beating maker of the Walkman, lost a whopping ¥456.66bn in the year to March, its fourth consecutive annual loss.

It also reported a widening loss in the first quarter and cut a profit forecast for the year.

Last month ratings agency Standard & Poor's downgraded its long-term corporate credit ratings on the firm to BBB, just two notches above junk status.

"Moody's expects Sony to narrow its losses through cost cuts in these businesses (of televisions and mobile phones), but will continue to experience losses at the operating level," it said.

"In addition, despite the long-term strategic importance of the medical devices business, the recent capital and business alliance with Olympus will further pressure Sony's cash flow," Moody's said.

Sony said last month that it will take a ¥50bn private placement of scandal-tainted Olympus shares by the fiscal year-end, which will make it the single biggest shareholder in the camera and endoscope maker.

Moody's said it would be difficult for Sony "to reduce debt without additional sales of non-core assets".


* Follow Fin24 on Twitter and Facebook

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
910.50
+1.5%
Palladium
1,011.50
+1.0%
Gold
2,221.35
+1.2%
Silver
24.87
+0.9%
Brent-ruolie
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders