updated 09:38 am EDT, Tue May 14, 2013
Manufacturer aims for small annual net profit following massive loss
Troubled electronics manufacturer Sharp has reportedly had its largest yearly net loss in its century-long history. The losses of 545 billion yen ($5.3 billion), which is higher than any other result in its last 100 years of doing business, with management at the company also seeing a reshuffle in another attempt to rectify its finances.
The Wall Street Journal reports the loss as being much larger than the 376 billion yen ($3.7 billion) loss last year, though it hopes to make a net profit of 5 billion yen ($49 million) for the fiscal year ending 2014. It also has nearly 2 trillion yen ($19.6 billion) in liabilities, which is said to be over ten times the amount of cash the company has to hand, and has a 200 billion yen ($1.96 billion) convertible bond set to be redeemed in September and 130 billion yen ($1.2 billion) in other redemptions in 2014.
As part of its attempts to right itself, it secured extra credit from the Mizuho Financial Group and the Bank of Tokyo Mitsubishi UFJ to the tune of 150 billion yen ($1.4 billion), on top of existing credit from the lenders of 360 billion yen ($3.5 billion). It has also seen investment from Samsung and Qualcomm, and plans to cut 5,000 jobs over the next three years.
Executive vice president Kozo Takahashi will be replacing the current president Takashi Okuda in June. Okuda will become a chairman without representative rights, replacing former president Mikio Katayama.