Japanese electronics giant Sharp Corp yesterday posted a record annual loss for the second year in a row, and announced plans to replace its current president after just one year on the job.
The maker of Aquos-brand electronics reported a net loss of ￥545.3 billion (US$5.4 billion) in the year to March, its worst-ever shortfall after losing ￥376 billion in the previous year.
However, Sharp said it expects to return to profitability in the current fiscal year.
“We apologize for having to book huge losses for two straight years,” Sharp executive director Tetsuo Onishi said after the disappointing figures were published.
Sharp, which is undergoing a massive restructuring, said that company veteran Kozo Takahashi would become its new president, replacing Takashi Okuda who was set to become chairman, a title that often precedes retirement in big Japanese companies. Okuda was appointed to the top job in April last year.
The changes are part of a wider management shuffle at the firm which said the record net loss was largely due to charges stemming from its wide-ranging overhaul.
However, problems in its long-suffering television business showed few signs of abating as sales “fell drastically,” it said.
Sharp blamed the downturn on sluggish demand at home and in key market China, where a consumer boycott of Japanese brands erupted last year over a territorial spat between Beijing and Tokyo.
“Mobile phone sales also declined, due mainly to supply shortages of key components in the first half of this fiscal year and severe competition with overseas manufacturers,” Sharp said.
On a more positive note, demand for Sharp’s LCD panels jumped on big demand for small and medium-sized panels used in smartphones and tablets, it said.
Sales in the latest period were ￥2.48 trillion, up from ￥2.46 trillion a year earlier, Sharp said, adding that it was on track to eke out a small ￥5 billion net profit in the current fiscal year to March next year.
However, “we anticipate the overall business environment will remain unpredictable,” it added.
Koki Shiraishi, an analyst with SMBC Nikko Securities, said Sharp would not be able to turn itself around without rolling out more “competitive products.”
“Sharp still needs further restructuring, which will haunt the company at a time when few companies can expect big sales given the current business conditions,” Shiraishi added.
The results cap off another tough earnings season for a company which last year warned over its survival and put up its Osaka headquarters as collateral to land crucial bank loans.