Panasonic restructure fuels profit

Shift to focus on less-known businesses has helped the company’s finances

Japanese electronics giant Panasonic said yesterday that its annual profit soared 49 per cent, strong results at its lesser-known auto parts unit and lower costs linked to a sweeping restructuring boosted its bottom line.

The Osaka-based firm’s earnings for the fiscal year to March surged to 179.49 billion yen (Dh5.5 billion, $1.5 billion), although revenue edged down 0.3 per cent to 7.7 trillion yen.

The upbeat figures underscore how Panasonic’s shift to focus on lesser-known businesses, including an energy and auto division, has helped its finances, and made it a standout as rivals Sony and Sharp continue to struggle.

Panasonic’s auto division makes various products found in vehicles, including electrical components and car navigation systems.

Sales in the unit rose “mainly to favourable demand in automotive business overseas especially in North America and Europe, offsetting a sales decrease from downsizing unprofitable businesses and transferring businesses”, it said in a statement.

For the current fiscal year, which started this month, Panasonic said it expects a 180 billion yen net profit on revenue of 8.0 trillion yen.

A sharply weaker yen has helped Panasonic and other major Japanese exporters as it made them more competitive overseas and inflated the value of repatriated profits.

The company said operating profit jumped 25 per cent as its restructuring translated into lower costs. After posting record losses in recent years, Panasonic along with rivals Sony and Sharp launched painful overhauls as falling prices in their television businesses hit their bottom line.