Japan's Sanyo Electric Co said on May 28 its net losses shrank by almost 78 percent in the year to March, helped by cost cuts, and forecast a return to profit this year.
The struggling electronics manufacturer reported a third straight year in the red, hit by fierce price competition. Sanyo posted a net loss of 45.36 billion yen (372.8 million dollars) for the financial year to March, down from 205.66 billion yen a year earlier.
At the operating level, the company said it had swung to a profit of 49.57 billion yen from a loss of 17.15 billion yen. The improvement came despite a 7.6 percent slump in revenue to 2.22 trillion yen.
Sanyo is reeling from a scandal over alleged window-dressing of its accounts and a row with major shareholders that led to the resignation in March of both its chairwoman and president, who was a member of the founding family of the Osaka-based firm which started out making bicycle lamps after World War II.
Sanyo said in February that it would review its past earnings and might correct its results after Japan's securities watchdog launched a probe into its accounts.
The group has been accelerating its restructuring with thousands of job cuts as part of efforts to stem its large losses, while pinning much of its revival hopes on brisk demand for its solar and rechargeable batteries. For the year to March 2008, Sanyo forecast net profit of 20 billion yen. Operating profit is projected to fall 9.2 percent to 45 billion yen while revenue is seen edging up 0.66 percent to 2.23 trillion yen.
The company is struggling to cope with higher prices of cobalt and nickel and expects only a marginal increase in revenue in the current financial year.
"The batteries division is one of those we are focusing on as it is growing briskly to the point where production is not catching up with demand, despite investment in the production line," vice president Koichi Maeda told reporters.
But he said rapidly rising material prices would restrain growth this year.
Operating profit in the component division, which includes rechargeable and solar batteries, semiconductors and electronic components, jumped almost sixfold to 67.61 billion yen but sales fell 5.0 percent to 900.67 billion.