Sony racks up £1.9bn loss
Sales and profits in Sony’s core electronics business both rose last year, but the company recorded an overall net loss of £1.9 billion primarily due to a write-off of £2.7 billion tax credits.
Sales in the year from April 2010 to March 2011 were ¥7.2 trillion (£363 billion), down 0.5 percent, and the company recorded a net loss of ¥260 billion. Sony ealrlier this year predicted a return to profit, but then shocked markets earlier this week by saying it was set to announce a third straight year of losses after being forced to write off the tax credits.
Operating profit, which excludes one-off and exceptional items and provides a better indicator of the profitability of the company’s core business, rose more than five times to ¥200 billion.
All of Sony’s major business segments recorded profits for the year.
The company’s consumer, professional products and devices division, which includes many of Sony’s consumer electronics products, managed to turn around losses and record a slim profit of ¥2.9 billion on a 1.6 percent jump in sales. The networked products and services division, which includes its PlayStation gaming business and laptop unit, saw sales rise 0.4 percent and reported a profit of ¥35.6 billion.
Sony’s Bravia LCD TV business enjoyed better sales in markets including Japan, where consumers took advantage of a government subsidies on digital TVs ahead of the end of analog broadcasting in July this year. But fierce competition in the market led to lower prices and that, along with unfavorable exchange rates, meant the Bravia business was a drag on profitability.
Strong profits in the flagship Bravia business have eluded Sony for years, despite increasing sales. Sony shifted 22.4 million televisions during the financial year, a jump of 43 percent on the previous year. For the current year, from April until March 2012, Sony is aiming to sell 27 million TVs.
The strong Japanese yen, which makes the price of Japanese goods more expensive in other countries, also hit the Vaio division. Laptop sales rose about 28 percent, but profitability didn’t follow.
PlayStation 3 sales were also strong at 14.3 million units during the year, up from 13 million in the previous year. Sales of the PlayStation Portable and PlayStation 2 both dropped.
For the current year, Sony expects sales to rise just over 4 percent, with a net profit of ¥80 billion.