Sharp Corp, a supplier of screens to Apple Inc, will raise as much as ￥166.4 billion (US$1.7 billion) in share sales in an effort to rebuild its balance sheet after record annual losses.
Japan’s largest LCD maker will sell as much as ￥149 billion of shares to the public, the Osaka- based company said in a statement yesterday.
The company will also make allotments to Makita Corp, Denso Corp and Lixil Group Corp, with proceeds to be used for capital expenditure, it said.
Intensified competition in LCDs and flat-panel TVs drove Sharp to losses totaling ￥921 billion during the past two fiscal years. The supplier for Apple’s iPhone and iPad is tapping into surging demand for new stock amid a Japanese rally in shares after previously selling minority stakes to Samsung Electronics Co and Qualcomm Inc.
Sharp also increased its first-half forecasts, with operating income projected at ￥30 billion in the six months ending Sept. 30 from ￥15 billion. Sales will be ￥1.31 trillion, up from an earlier projection of ￥1.27 trillion. The company’s net loss forecast was halved to ￥10 billion.
Domestic demand for its solar panels and better-than-expected sales of large LCD screens have helped restore earnings, the company said.
The stock rose 1.6 percent to close at ￥376 in Tokyo trading before the announcement. The shares have climbed 24 percent so far this year, while Japan’s benchmark TOPIX has gained 39 percent.
Sharp last month reported a net loss of ￥18 billion in the June quarter, narrower than the ￥138 billion loss a year earlier. Operating profit, or sales minus the cost of goods sold and administrative expenses, totaled ￥3 billion for the quarter, compared with a loss of ￥94 billion a year earlier, the company said. Sales rose 33 percent to ￥608 billion.
The operating loss at the LCD unit contracted to ￥9.5 billion during the quarter, from a loss of ￥63.5 billion a year earlier, according to the company.
Improved Japanese sales of solar cells follows the introduction of an incentive program in July last year to encourage investments in clean energy. Residential use and industrial- sized solar projects are spurring demand, Sharp has said.
Japan’s domestic shipments of solar cells and modules surged almost fourfold in the fiscal first quarter, the Japan Photovoltaic Energy Association said on Sept. 12.
Operating profit at the electronics maker’s solar unit was ￥6.8 billion in the three months ended June 30, compared with a ￥6.9 billion loss for the same period last year, the company said in a filing last month.
Sharp has ￥200 billion of convertible bonds maturing at the end of this month, according to data compiled by Bloomberg. The maker of Aquos TVs is forecasting net income of ￥5 billion for the year ending in March next year, its first annual profit in three years, after job cuts.