Tokyo: Scandal-plagued electronics maker Sanyo announced on 28 May that it has trimmed its losses for the fiscal year and forecast a return to profit for the current year as it cut costs. Sanyo sharesn have in anticipation of this positive development jumped 3.2%
Sanyo Electric Co. has undergone a reshuffle at its top management after acknowledging recently that it had falsified its fiscal 2003 earnings, in which it had reported a profit but could have been in the red.
With a loss of $373 mn (Rs1492 crore) for the fiscal year through March, Sanyo has now posted losses for the three years running. But this was better than the 205.7 billion yen loss which it reported last financial year.
The accounting scandal surfaced as the Japanese electronics maker of digital cameras and batteries was undergoing a turnaround, reducing jobs and shuttering unprofitable businesses under a revival plan.
The annual profit figure was slightly better than the $411 mn loss which the company had expected.
Sales sagged 7.6% to $18.1 bn though Sanyo has confirmed that its bottomline has improved, thanks to cost cuts.
For the fiscal year ending March 2008, the electronics major is projecting a return to the black with a profit of $18.3 bn.
Also, the falling prices of digital cameras and mobile phones hurt its earnings but demand was solid for navigation equipment, rechargeable batteries and solar cells used for solar energy systems.
Following the embarrassing scandal, Sanyo appointed a new president, Seiichiro Sano, who took office last month, and the first time someone outside the founding Iue family has led Sanyo, either as president or as chairman, since it opened for business in 1947.
He replaced Toshimasa Iue, who stepped down in March, apologizing for having failed to achieve reforms and change. In another high-profile resignation, Tomoyo Nonaka resigned as Sanyo chairwoman in March. Since her appointment in 2005 to head a revival, she was heralded as an example of the rise of a new breed of women in corporate management, who are still very rare in sexist and conformist Japan.
Like other Japanese electronics makers Sanyo has been pummeled in recent years by the price plunge in gadgets. It was also hurt by a 2004 earthquake near its chip-making plant.
In the last few years, the company has trimmed thousands of jobs, reduced factory space and dropped some businesses. It is now fully cooperating with the investigation into its accounting problems and is correcting its earnings statements from fiscal 2000.