Canon cuts profit on strong yen
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. –