TOKYO: Struggling Japanese electronics giant Sony on Thursday said it booked its first annual net profit in five years, offering a glimmer of hope for the once-iconic firm.
Sony said it earned 43.03 billion yen ($436.08 million) for the fiscal year to March, reversing a whopping loss of 456.66 billion yen a year earlier, as a sharply weaker yen helped boost Japanese exporters' competitiveness and inflated the value of their foreign income.
Sales in the period were 6.8 trillion yen, up 4.7 percent on-year, Sony said, adding that it expects to post a net profit of 50 billion yen in the current fiscal year to March 2014 on sales of 7.5 trillion yen.
Earlier this month, the firm said dozens of senior executives including chief Kazuo Hirai would forego their annual bonuses to atone for a slump in Sony's electronics unit.
The decision came after the maker of PlayStation game consoles and Bravia televisions launched a massive corporate overhaul to stem losses, including thousands of job cuts and a string of asset sales, including office buildings in Manhattan and Tokyo.
Japan's electronics sector, including Sony rivals Panasonic and Sharp, has suffered myriad problems including slowing demand in key export markets, fierce competition from lower-cost foreign rivals and strategic mistakes that left its finances in ruins.
A tumble in the yen in recent months -- losing about a fifth of its value against the dollar since November -- has helped Japan's exporters, making their products move competitive overseas and boosting the value of repatriated foreign income, inflating their bottom line.
Sony said the weaker yen boosted its results particularly in its film division, as demand for its digital cameras, video cameras and televisions remained weak, although Sony's CFO said Thursday he expected the TV business to turn a profit in the current fiscal year.
Japanese firms, including Sony rivals Panasonic and Sharp, have struggled in the low-margin TV business where foreign rivals have proved tough competition.
On Thursday, Sony said it earned 43.03 billion yen ($436.08 million) for the fiscal year to March, reversing a 456.66 billion yen loss a year earlier.
Sales in the period were 6.8 trillion yen, up 4.7 percent on-year, Sony said, adding that it expected to post a net profit of 50 billion yen in the current fiscal year to March 2014 on sales of 7.5 trillion yen.
Sony's expected revenue in the current fiscal year was "primarily due to the depreciation of the yen and an increase in sales in the electronics businesses," it said.
Sony's corporate makeover, which Hirai has described as "urgent", also includes the sale of its chemical division and investing 50 billion yen in camera and medical equipment maker Olympus as part of a drive to tap the lucrative medical equipment market.
Although it is better known for its cameras, Olympus controls about 70 percent of the global market for medical endoscopes.
Sony has also announced the launch its PlayStation 4 system as it faces increasing competition from cheap -- or sometimes free -- downloadable video games for smartphones and tablets.
Sony's Tokyo-listed shares, which last year fell below 1,000 yen for the first time since the era of the Walkman, closed 1.35 percent lower at 1,744 yen on Thursday. It results were published after markets closed. (AFP)
