Sanyo Aims to Double Operating Profit in 3 Years
Mar 17, 2003
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Japanese consumer products maker Sanyo Electric Co. Ltd. said on Monday that it aimed to double its operating profit in the next 3 years, bolstered by organizational reforms.
The company, which last Friday forecast a record net loss for the year to March 31 due to restructuring costs and losses on shareholdings, said it would rearrange its operations on April 1 into 280 business units with clear responsibility for making profits.
Sanyo, which makes products such as home appliances, consumer electronics, and cell phone batteries, is aiming for a 160-billion yen (U.S. $1.35-billion) consolidated operating profit in the business year starting in April 2005, compared with a 78 billion yen profit for this business year.
It is targeting a net profit of 90 billion yen in 2005/2006, compared with this year's estimated 70-billion yen loss, on revenues of 3.0 trillion yen, up nearly 40 percent from this year's 2.16-trillion yen target.
Although Sanyo exited vending machine manufacturing and other troubled businesses and stepped up an overseas shift of home appliance production, some analysts complain that, like most of Japan's electronics conglomerates, its restructuring has proceeded too slowly.
Sanyo's last long-term earnings plan, announced 2 years ago, had set ambitious targets for the 2003/2004 business year of a 165-billion yen operating profit and a 73-billion yen net profit, on 2.5 trillion yen in revenues.
Sanyo Chairman Satoshi Iue told a news conference the new corporate structure would take a strict line on profitability for individual businesses, pulling out of those that had no prospects of earning a profit over the next 3 years. New businesses would also be scrapped if they could not generate a profit during their first 3 years.
As for the near term, the company gave mixed signals on Friday for the business year ending on March 31, revising its consolidated net forecast to a loss while its operating profit and revenue estimates were nudged upward. (Reuters)
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