Japan's Sanyo Electric Co reported its first annual net profit in four years on May 22 after drastic streamlining helped return the struggling electronics maker to the black. The Osaka-based company expects further bottom line growth this year on the back of rising sales of digital cameras and rechargeable batteries.
Sanyo has slashed thousands of jobs and sold non-core operations as part of a massive overhaul in recent years, while increasing its focus on rechargeable batteries.
The revamp appears to be paying off, with the company posting better than expected net profit of 28.7 billion yen (278.4 million dollars) for the fiscal year to March, against a year-earlier loss of 45.4 billion yen.
Operational profit jumped 78.7 percent to 76.1 billion yen, while sales rose 7.2 percent to 2.02 trillion yen. "Despite the yen's strengthening and the rising costs of raw materials, cost cuts and growing contributions from such products as digital cameras, flat-panel TVs and car navigation systems helped us turn around our earnings substantially," Sanyo Electric president Seiichiro Sano told a news conference.
The group slashed its group workforce by more than 10 percent last year and sold its loss-making mobile telephone manufacturing business to rival Kyocera and its finance subsidiary Sanyo Electric Credit to Wall Street giant Goldman Sachs.
It expects the recovery in its bottom line to continue in the current fiscal year to March 2009, forecasting a 22 percent rise in net profit to 35 billion yen.
Operating profit, however, is expected to drop to 50 billion yen on steady revenue of 2.02 trillion yen. The company expects the stronger yen and higher raw material and fuel costs to undermine overseas earnings.
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