Sony posts record full-year loss

2012-05-10 10:57

Tokyo - Japanese electronics giant Sony on Thursday posted a record full-year loss of $5.7bn, but vowed it would swing back into the black this year as it embarks on a huge restructuring plan.

The ¥456.66bn loss for the year to March, its fourth consecutive year in the red, came after Sony said last month it would cut about 10 000 jobs and spend nearly $1bn on an overhaul its new chief described as "urgent".

Sales for the year fell 9.6% to ¥6.49 trillion, while the firm booked an operating loss of ¥67.28bn.

Sony, which is struggling to stem losses at its television division, on Thursday said a strong yen and natural disasters were among the main reasons for its disastrous earnings figures.

"Sales decreased... primarily due to unfavourable foreign exchange rates, the impact of the Great East Japan Earthquake... the floods in Thailand, and deterioration in market conditions in developed countries," it said in a statement.

The firm has also blamed tough competition and falling prices, particularly in the television segment, for its struggles.

But it said it was on course to post a net profit of ¥30bn in the current fiscal year, with operating profit of ¥180bn on sales of ¥7.4 trillion.

At a press conference in Tokyo on Thursday, Sony's Chief Financial Officer Masaru Kato said: "We consider fiscal year 2012 to be the very important year to rehabilitate the electronics division."

Sony's reforms, in addition to the jobs cuts, also include expanding its PlayStation and online games business, and pushing further into emerging markets and new sectors, such as medical equipment and life sciences.

"Now is the time for Sony to change," Kazuo Hirai, who replaced Welsh-born US chief executive Howard Stringer earlier this year, said from the company's Tokyo headquarters while announcing the turnaround plan in April.

"What is urgent is that we strengthen our core businesses while rebuilding our TV business."

Investors, however, have been unimpressed, sending Sony shares down 1.22% on Thursday to ¥1 213 before the earnings release was issued after markets closed.

Sony shares stood at ¥1 528 before Hirai made his announcement last month.

Analysts have criticised the plan as not enough to win back Sony's reputation as an innovator or vault ahead of its foreign rivals, and questioned Hirai's plan to boost revenue to ¥8.5 trillion by 2015.

Sony, along with Japan's other electronics giants including Panasonic and Sharp, has been fighting a losing battle for years against fierce competition offered up by competitors including South Korea's Samsung and US-based Apple.

Falling prices, particularly in the television segment, have eaten away at their bottom line as a strong yen made their products more expensive overseas, while a stuttering global economy also knocked sales.

Sony still generates profits in some areas, such as electronics parts, but critics have accused the company of various strategic blunders over the years including being late to enter the liquid crystal display panel market.

The firm was forced in December 2008 to slash 16 000 jobs worldwide as it came under pressure amid tumbling demand during the global financial crisis.

In March, Sony announced the sale of its chemical division to the Development Bank of Japan, saying the unit did not fit with its revamp.