Sony Reports First Annual Profit In Five Years
Sony has reported an annual profit for the first time in five years, boosted by a weakening yen and asset sales.
The electronics giant made a net profit of 43bn yen ($436m; £280m) in the year to 31 March, reversing a loss of 457bn yen in the same period a year earlier.
Sony said the yen’s recent fall, which makes Japanese goods cheaper for foreign buyers, had helped boost sales.
A weak currency also boosts profits of Japanese exporters when they repatriate their foreign earnings back home.
The Japanese currency has fallen more than 20% against the US dollar since November last year, after policy makers unveiled a series of aggressive measures aimed at spurring growth in the economy.
The firm said it expected its profits to rise to 50bn yen in the current financial year.
Asset sales
Sony, which was once a market leader in various product categories, has seen its fortunes plummet over the past few years.
Increased competition, falling prices and narrowing profit margins have hurt its business, especially in the TV segment which has been making a loss for the past eight years.
As a result, Sony has been trying to restructure its business model and reduce its costs.
As part of the restructuring process, the firm has sold key assets over the past few months, including its US headquarters in New York and some of its shares in M3, a medical research and marketing firm.
The firm has also offloaded its “Sony City Osaki” building in Tokyo.
Sony said the sale of all these assets had resulted in gains of nearly $2.5bn during the last financial year – and the figure contributed to the rise in its earnings during the period.
Analysts said that given the impact these sales have had on the profit – the numbers were not a true reflection of the firm’s success.
Gerhard Fasol of Eurotechnology Japan said that these gains “really need to be subtracted from the results, to understand the regular operating results”.
Mr Fasol pointed out that the firm’s results indicated that its electronics division continued to struggle and that the unit had not been turned around yet.
BBC
