Japan’s Sanyo Electric Co reported its first annual net profit in four years yesterday after drastic streamlining helped return the struggling electronics maker to the black.
The Osaka-based company expects further bottom line growth this year on the back of rising sales of digital cameras and rechargeable batteries.
Sanyo has slashed thousands of jobs and sold non-core operations as part of a massive overhaul in recent years, while increasing its focus on rechargeable batteries.
The revamp appears to be paying off, with the company posting better than expected net profit of ¥28.7 billion (US$278.4 million) for the fiscal year to March, against a year-earlier loss of ¥45.4 billion.
Operational profit jumped 78.7 percent to ¥76.1 billion, while sales rose 7.2 percent to ¥2.02 trillion.
“Despite the yen’s strengthening and the rising costs of raw materials, cost cuts and growing contributions from such products as digital cameras, flat-panel TVs and car navigation systems helped us turn around our earnings substantially,” Sanyo Electric president Seiichiro Sano told a news conference.
The group slashed its group workforce by more than 10 percent last year and sold its loss-making mobile telephone manufacturing business to rival Kyocera and its finance subsidiary Sanyo Electric Credit to Goldman Sachs.
It expects recovery in its bottom line to continue this fiscal year to next March, forecasting a 22 percent rise in net profit to ¥35 billion.
Operating profit, however, is expected to drop to ¥50 billion on steady revenue of ¥2.02 trillion.
The company expects the stronger yen and higher raw material and fuel costs to undermine overseas earnings.
Sanyo has earmarked ¥122.5 billion for capital spending this year, up 54 percent from last year, to try to expand its battery and solar panel segments.
“We saved on capital spending and focused on steps to revamp our earnings in the past three years, and are now moving forward to step up capital spending aggressively,” Sano said.