Sanyo forecasts profit turnaround

29 May 2007

In its annual forecast for the 2007 financial year, Sanyo Electric forecasts a net income of 20bn yen (€120m) compared with last year’s loss of 45.36bn yen (€278.8m).

Despite last year’s overall net loss, Sanyo’s operating profit stood at 49.57bn yen (€302.85m). The overall loss, the company said, was due to its restructuring costs, which alone cost the company 27.1bn yen (€165.6m).

Further costs included the implementation of an early retirement programme, to which 1,000 workers applied, to the tune of roughly 11bn yen (€67.2m).

The profit forecast of 20bn yen, which remains unrevised since December of last year, leaves the company under pressure to reach this goal. Sanyo this month sold its leasing unit and is looking to sell its computer chip section.

Sanyo’s digital camera sales were affected by stiff competition from other producers such as Canon and its rechargeable battery business, which is the world’s largest, has been affected by the increasing cost of raw materials like cobalt and nickel.

If Sanyo can reach its profit target of 20bn yen it will represent its first annual profit in four years.

Sanyo also yesterday announced executive personnel changes, including the replacement of company president, Toshimasa Iue, grandson of Sanyo’s founder. However, he will be appointed as special advisor starting on 28 June.

By Marie Boran