TOKYO: Panasonic on Friday posted a record $9.67 billion annual loss as one of Japan's flagship companies was hammered by a strong currency, natural disasters and stiff competition from foreign rivals.
The 772.2 billion yen shortfall, one of the worst-ever losses for a non-financial Japanese firm, comes as the consumer electronics giant reshuffles its boardroom and overhauls its business in a bid to return to profitability.
The result was slightly better than the 780 billion yen net loss that the Osaka-based company had earlier forecast, but its shares plumbed 30-year lows, falling 1.55 percent to 570 yen on Friday.
"This result was due mainly to price declines and the appreciation of the yen, in addition to a sales decrease affected by the Great East Japan Earthquake and the flooding in Thailand," the company said in a statement.
But Panasonic projected it would return to the black in the current fiscal year through March 2013 with a net profit of 50 billion yen.
"Although the company expects some risks to continue, the global economy is expected to show a slow recovery in fiscal 2013," the firm said.
"Under such business conditions, Panasonic regards fiscal 2013 as the first year in which it will achieve positive results following large-scale structural reforms and reorganisation," it added.
The latest results stand in stark contrast to Panasonic's net profit of 74 billion yen in the year to March 2011, and its first forecast for the current year, which was for a 30 billion yen profit.
"We've undertaken an unprecedented level of restructuring," Takumi Kajisha, senior managing executive officer, told a news conference, according to Dow Jones Newswires.
"No matter what, we will achieve a V-shaped recovery."
But Hiroshi Sakai, chief economist at SMBC Friend Research Center, warned Panasonic and other Japanese electronics giants should not be "too optimistic" about a recovery this year.
"Japanese electronics companies are likely to show moderate recovery from the tough year, but whether they can achieve a V-shaped recovery depends on how they can redefine their own core businesses," Sakai said.
"They have to drop unprofitable businesses, concentrate on profitable ones and revamp their entire business structure," he said.
Panasonic, like its rival Sony which posted a record 456.66 billion yen loss on Thursday, has long suffered major losses in its television business and its debt soared due to the purchase of smaller rival Sanyo.
A torrid year for the firm, Japan's third-largest mobile handset manufacturer behind Sharp and Fujitsu, saw it downgraded by two credit ratings agencies and announce a plan to reduce head count by 17,000 people.
Japan's electronics sector has been badly hit by the appreciation of the yen, which makes exporters' products less competitive overseas, while falling prices and slow demand at home have also eaten into profits.
The nation's electronics giants have been fighting for years against fierce competition offered up by competitors including South Korea's Samsung and US-based Apple, with high resolution display technology a key battleground as demand intensifies for smartphones, tablet computers and other gadgets.
Panasonic has announced a major restructuring of its liquid crystal display manufacturing division, and is reportedly considering shifting all of its mobile phone handset production overseas amid high costs at home.