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Sharp's 1st-half operating profit falls 13.6% due to sales tax hike
[October 31, 2014]

Sharp's 1st-half operating profit falls 13.6% due to sales tax hike


(Japan Economic Newswire Via Acquire Media NewsEdge) Sharp Corp. said Friday its group operating profit in the April-September period fell 13.6 percent from a year earlier to 29.22 billion yen, as domestic demand for items such as televisions and solar panels faltered due to the April 1 consumption tax hike.



But the struggling electronics maker logged a group net profit 4.74 billion yen, its first black ink in the six-month period in four years, as gains on securities sales helped offset costs stemming from restructuring its unprofitable European operations.

Sharp's mainstay small and medium-sized liquid crystal display panels sold well to Chinese smartphone makers, but the results were not enough to lift its operating profit, the company said. Group sales also fell 1.1 percent to 1.33 trillion yen.


Touching on the failure to achieve its earlier projected profits for the half-year period, President Kozo Takahashi told a press conference in Tokyo, "We must recover (the losses) by all means in the full-year period." Sales of LCDs for use in smartphones and tablet devices to Chinese clients amounted to around 100 billion yen in the first half of the business year, and a stronger outcome is expected in the second half, Takahashi added.

For the full business year ending March, Sharp maintained its forecast of a consolidated net profit of 30 billion yen, up 159.5 percent from the previous year, and an operating profit of 100 billion yen, down 7.9 percent.

It revised downward its sales outlook to 2.9 trillion yen from an initially projected 3 trillion yen.

While the U.S. dollar surged against the yen on Friday after the Bank of Japan unexpectedly decided to further ease its monetary policy, Takahashi said the company's profit will be "little" affected as the negative and positive impacts of a weaker yen are "nearly balanced" over its entire business.

Since posting a record group net loss of 545.35 billion yen in fiscal 2012, Sharp has closed its solar cell business in Europe and has signed brand licensing agreements with Slovakian and Turkish companies to make and sell home appliances in Europe.

In its latest earnings report, the Osaka-based company said it booked 5.7 billion yen in extraordinary losses as structural reform costs related to its household appliances business in Europe.

But Sharp was able to post a net profit partly due to gains on securities sales, it added. In the April-September period last year, the company recorded a net loss of 4.33 billion yen.

(c) 2014 Kyodo News

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