Panasonic's operating profits rise as sales continue to fall
Cost cutting at Panasonic has led to a 268% rise in operating profits to ¥160.9bn (£1.03bn) for the financial year to March 31st 2013, up from ¥43.7bn (£0.28bn) the previous year. Pre-tax losses fell from ¥812.8bn (£5.21bn) in 2012 to ¥398.4bn (£2.55bn) in 2013, and included restructuring costs of ¥508.8bn (£3.26bn).
The improved financial performance came despite a fall in sales. Consolidated group sales were down 7 per cent to ¥7,303bn (£46.82bn), with domestic sales in Japan dropping 9 per cent and overseas sales down by 5 per cent.
Although helped by the yen depreciating against the dollar and euro, and a recovery in the US stock market, Panasonic says demand for flat-panel TVs, especially in Japan, remains "sluggish".
"Sales significantly decreased, due mainly to a decline in the digital AV networks business including TVs," says Panasonic.
The company predicts its operating profit for the next year will rise by 55 per cent to ¥250bn (£1.6bn) as it continues its New Midterm Management restructuring plan and pulls back from its reliance on its struggling TV operation.
Last month Panasonic's boss Kazuhiro Tsuga and incoming chairman Shusaka Nagae announced they would take a salary cut of 60 per cent each.
Tsuga has already wielded the axe at Panasonic's corporate HQ, cutting the staffing from 7000 to just 130, and says that in future the company will earn money first before making investments such as the ¥600bn (£4bn) it has invested in plasma over the years.