Canon cuts profit on strong yen

The Myanmar Times - - International Business -

CANON chopped its an­nual profit fore­cast yes­ter­day as the cam­era and copier maker warned that a sharp rise in the yen was tak­ing a bite out of its bot­tom line.

The com­pany said it now ex­pected weaker sales and a net profit of 180 bil­lion yen (US$1.7 bil­lion) this year.

This fore­cast is down 10 per­cent from a pre­vi­ous fore­cast that had also been down­graded due to slow­ing growth in China and a pickup in Ja­pan’s cur­rency.

Canon’s lat­est six-months-to-June net profit fell 20pc to 81.4 bil­lion yen, while op­er­at­ing profit dropped nearly 37pc from a year ago.

Sales fell al­most 10pc to 1.66 tril­lion yen for the half-year pe­riod, it said.

Canon cut its full-year tar­get ow­ing to the “pro­longed eco­nomic slow­down in de­vel­op­ing coun­tries, along with the neg­a­tive im­pact of the re­vised for­eign ex­change rate as­sump­tions on sales and gross profit”, the com­pany said in an an­nounce­ment.

The yen – tra­di­tion­ally seen as a safe-haven cur­rency – rose sharply at the start of the year as fears over global growth ham­mered fi­nan­cial mar­kets.

The cur­rency spiked again af­ter Bri­tain’s vote last month to leave the Euro­pean Union stoked a new wave of con­cern about the di­rec­tion of the world econ­omy.

A strong yen is un­de­sir­able for Ja­panese ex­porters such as Canon be­cause it makes them less com­pet­i­tive overseas and shrinks the value of repa­tri­ated for­eign prof­its. –

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