China weighs on Panasonic annual profits

Tokyo (AFP) – Panasonic said on Thursday it recorded solid annual profits boosted by televisions and household appliances, though a sales slowdown in China sapped momentum. 

One of Japan’s mainstay companies and most recognisable abroad for electronics, Panasonic has shifted to lesser-known businesses such as energy and an auto division that makes products for vehicles, including stereos and navigation systems.

Panasonic has also undergone a huge restructuring in response to toughening competitions from Asian rivals in recent years in an effort to close the door on record losses.

The Osaka-based company said its net profit for the past year to March rose 7.7 percent to 193.3 billion yen ($1.78 billion), while operating profit rose 8.8 percent to 415.7 billion yen.

Sales, meanwhile, edged down 2.1 percent to 7.55 trillion yen.

The figures were largely in line with its downgraded forecasts, released in February as a slowdown in Chinese and other emerging markets were expected to weigh on the bottom line.

Panasonic cited improving profitability in televisions and strong sales of household appliances, known in the industry as “white goods”. 

But sales of solar panels for household use struggled, while the company downsized foreign television operations to focus on profitability rather than sales volume, it said.

“Positive performances in white goods and a recovery in its TV sector contributed to profit gains for the past fiscal year,” said Yasuo Nakane, senior analyst at Mizuho Securities.

“But a sales slowdown in China and developing countries as well as a decline in the currencies of emerging economies led negative factors for the past fiscal year and will remain concerns for the current fiscal year,” he told AFP.

For the year to March 2017, Panasonic said it expects net profit of 145 billion yen and operating profit of 310 billion yen. Sales are seen at 7.6 trillion yen. 

“Now that Panasonic has completed its restructuring, it’s time for the company to review what business it intends to focus on,” Nakane said.

“Mergers and acquisitions are also regarded as an option to expand its businesses.”