Panasonic's operating profits rise as sales continue to fall

Panasonic TX-P55VT65B

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.

MORE: Read our Pansonic TX-P55VT65B review

MORE: Read our Panasonic TX-L55WT65B review

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.

By Andy Clough

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Andy Clough

Andy is Global Brand Director of What Hi-Fi? and has been a technology journalist for 30 years. During that time he has covered everything from VHS and Betamax, MiniDisc and DCC to CDi, Laserdisc and 3D TV, and any number of other formats that have come and gone. He loves nothing better than a good old format war. Andy edited several hi-fi and home cinema magazines before relaunching in 2008 and helping turn it into the global success it is today. When not listening to music or watching TV, he spends far too much of his time reading about cars he can't afford to buy.