Panasonic’s FY17 results lower than expected on home appliance’s underperformance
KUCHING: Panasonic Manufacturing Malaysia Bhd’s (Panasonic) financial year 2017 (FY17) results have come in lower than expected on the group’s home appliance segment’s underperformance.
In a filing on Bursa Malaysia, Panasonic noted that the company achieved a combined profit before tax (PBT) of RM158.1 million for the year ended March 31, 2017, a decrease of RM27.1 million or 14.6 per cent as compared to the previous year’s corresponding period of RM185.2 million due to higher operational expenses and other derivative losses.
According to the research arm of MIDF Amanah Investment Bank Bhd ( MIDF Research), despite stellar performance from fan product segment, the home appliance segment has posted weaker numbers.
“This has impacted the group’s performance,” it observed.
MIDF Research noted that Panasonic’s fourth quarter of FY17 ( 4QFY17) normalised earnings came in at RM26.2 million, translating into a decrease of 20.9 per cent year on year (y-o-y).
“The reduction in earnings was mainly attributable to the lower demand for its home appliances products from the Middle East region as well as higher operating costs.
“The operating costs was impacted by rising costs of raw materials such as steel, copper, resinandothermajorcomponents,” the research arm said.
The research arm further noted that fortunately, income from the group’s40percent-ownedassociate, Panasonic Malaysia Sdn Bhd, has shown some improvement.
All in, the group’s financial performance came in below MIDF Research’s and consensus estimates, accounting for 87.8 per cent and 91.8 per cent of full year FY17 earnings estimates respectively.
The research arm has thus cut its FY18 earnings estimates by 8.4 per cent as it assumed lower revenue contribution and lower PBT margin from the home appliance segment.
Fo l l owing its earnings adjustment, MIDF Research derived a new target price of RM32.40 per share from RM35.32 per share previously.
All factors considered, the research arm maintained its ‘neutral’ recommendation on the stock.