Hitachi posts record loss for Japanese manufacturers

Japanese companies unveiled a string of gloomy results today as major exporters continue to take a battering from the global recession.

Hitachi confirmed it had suffered the worst loss ever for a Japanese manufacturer and warned of another difficult year ahead.

The firm, which makes consumer electronics and industrial equipment, said net losses had mounted to ¥787.3bn (£5.3bn) in the year through to 31 March from a ¥58.1bn loss a year earlier.

Hitachi said it expected losses to come to ¥270bn this year amid a sharp drop in demand for electronic gadgets, chips and cars incorporating its products.

In January it responded to the fall in sales by announcing plans to shed 7,000 jobs, or almost 2% of its global workforce.

"The global economy is not expected to see a fully fledged recovery until 2010 at the earliest," the company said.

"The global economic outlook is being shaped by concerns about the US and other industrialised nations slipping into negative economic growth, and about slowing economic growth in emerging economies and the yen's appreciation."

Hitachi's results are the biggest ever loss in Japan's manufacturing sector and the second largest in the country's corporate history after Nippon Telegraph and Telephone's ¥834.6bn loss in 2002.

There was more gloomy news today from NEC, which swung from a ¥22.7bn profit in 2007 to a loss of ¥297bn for the year that ended in March. The electronics maker said sales had fallen 8.7% to ¥4.2tn.

"The rapid economic decline and subsequent decrease in demand during the second half, particularly in the electron device business, resulted in sales declines throughout all business segments," it said in a statement.

The firm hopes its restructuring plan, which includes the loss of more than 20,000 jobs, will help it achieve a ¥10bn net profit this year.



Sony downbeat too


Sony is expected to announce its first net loss for 14 years on Thursday, in a blow to chief executive Sir Howard Stringer's efforts to revive the company's fortunes. The firm is expected to record a net loss of ¥150bn compared with a ¥369.4bn profit a year earlier after suffering a projected 13% drop in annual sales.

A week after Toyota announced its first net losses for almost 60 years, Japan's third-biggest carmaker, Nissan, said it had posted its first loss since it was rescued from near bankruptcy a decade ago by chief executive Carlos Ghosn.

The firm reported an operating loss of ¥137.9bn after a ¥790.8bn profit last year.

Ghosn warned of more volatility in the global car market, but he said recent measures to ease the effects of the recession were having an impact.

"We are beginning to see some signs of improved access to credit, the impact of government stimulus packages and a gradual return in consumer confidence," he told reporters. "The crisis is ongoing and market conditions are still volatile."

The losses were slightly lower than Nissan had projected, and although revenue plunged 22% last year, the fall was not as bad as expected. The firm said it hoped to reduce its losses over the coming year to ¥170bn.

"We are preparing ourselves to be back in profit, in the worst case, by 2010," said Ghosn, who is also chief executive of Renault.

Nissan, which is 44% owned by Renault, blamed its predicament on a triple whammy of the US financial crisis, the global recession and the strength of the yen, which eats into profits from vehicles sold overseas. It has announced 20,000 job cuts this year, including 1,200 at its plant in Sunderland.