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Sharp logs hefty LCD-linked losses, Hon Hai frontrunners for buyout

Xinhua, February 4, 2016 Adjust font size:

Sharp Corp. said Thursday it had posted an operating loss of 29.04 billion yen (246.25 million U.S. dollars) in the April to December period, as a slump in sales of its LCD displays weighed heavily on the struggling electronics maker.

The loss compares to a profit of 51.26 billion yen logged during the same period a year earlier, with the manufacturer also logging a group net loss of 108.33 billion yen, compared to a loss of 7.16 billion yen logged last year, on sales of 1.94 trillion yen, a drop of 7.1 percent.

The firm, however, opted to maintain its group earnings outlook for the full year through March 31, and said it projects an operating profit of 10 billion yen on sales of 2.7 trillion yen.

Sales slumped 11.7 percent in the nine-month period in its device sector, Sharp said, as demand for its LCD displays used for smartphones retreated and the embattled firm had also seen a 16.6-percent decline in sales of its consumer electronics products.

The ailing compny, according to its President Kozo Takahashi, is poised to accept a rescue offer from Taiwanese firm Hon Hai Precision Industry Co. in favor of an alternative offer of being bailed out by a fund backed by the government here.

"We're throwing our resources into negotiations with Hon Hai," Takahashi told a press conference Thursday. The deal is purportedly a sale of the firm to Hon Hai for more than 600 billion yen (5.08 billion U.S. dollars), although negotiations were still continuing.

The government has been keen to rescue one of the nation's flagship electronics makers, with the Innovation Network Corporation of Japan, which it supports, proposing a 300-billion-yen turnaround plan.

Sources close to the matter have said, however, that Hon Hai's deep-pockets will likely see the buyout go to the Taiwanese company, which has purportedly said it will keep the current Japanese executives in their positions.

Sharp restructured its operations in May last year, slashing jobs and selling its head office, as banks pumped 225 billion yen into the struggling firm, following losses from its LCD business, which was and is failing to compete with its other Asian rivals. Endit