About a fifth of Panasonic Corp's 88 business units are
losing money and only half so far meet a target for at least 5 percent
operating margin, the Japanese electronics group's finance chief said in
an interview on Wednesday.
Hideaki Kawai said the country's biggest
commercial employer will axe another 10,000 jobs by end-March as it
pares its costs and looks to return to profit. Panasonic shed 36,000
jobs last business year, some through the sale of businesses.
new boss has said businesses must achieve at least a 5 percent
operating profit target within three years," Kawai said, referring to
Kazuhiro Tsuga, who took over as company president in June. "But we
won't wait that long to tackle units that need to be dealt with."
and business closures will start as early as next year, he told Reuters
at Panasonic's headquarters in Kadoma, near Osaka in western Japan.
said Panasonic aims to earn group operating profit of at least 200
billion yen in the year to end-March 2014 - in line with forecasts by
analysts polled by Thomson Reuters StarMine.
Panasonic warned last
month it will lose close to $10 billion in the year to March as it
writes off billions of yen in tax-deferred assets and goodwill related
to its mobile phone, solar panel and small lithium battery businesses.
It also put aside money to cover the lay-offs and other restructuring
Panasonic plans to offload assets worth 110 billion yen
before the end of March, mainly land and buildings in Japan, Kawai said.
More assets sales will follow from next business year if needed to
bolster cash flow.
Panasonic's 'garage sale' comes ahead of a
turnaround plan that Tsuga has promised to unveil by end-March, which
will be the start-line to offload underperforming businesses. As
financial chief overseeing hundreds of accountants spread across a
sprawling conglomerate, Kawai plays a key role in helping Tsuga identify
which businesses to close, sell or merge.
Selling businesses and
offloading other assets should boost Panasonic's cashflow and help pay
for the latest restructuring at a company that began in 1918 making
electrical socket extensions and bicycle lamps, and now employs 300,000
Panasonic shares, already trading near multi-decade lows,
slumped by almost a fifth on November 1 on the loss forecast, and
Standard & Poor's has cut its credit rating to close to junk. The
stock closed up 0.8 percent on Wednesday, ending a four-session losing
Ahead of its earnings revision, Panasonic won $7.6 billion
in loan commitments in October from banks including Sumitomo Mitsui
Financial Group and Mitsubishi UFJ Financial Group, a funding backstop it says will help it avoid having to
seek capital from credit markets.
"Panasonic's debt holders are
concerned and it is critical for us to improve our finances," Kawai
said. Panasonic this year aims to cut net debt to 770 billion yen from
1.08 trillion yen and will look for another 200 billion yen improvement
next business year.
Japan's big banks have also provided TV rival
Sharp Corp with $4.6 billion in emergency loans, though
the maker of Aquos TVs warned this month it may not survive alone as it
expects a $5.6 billion net loss this business year.
ailing consumer electronics brand Sony Corp, inventor of
the personal music player, lowered its target for its handheld PSP and
Vita games consoles, TVs and digital cameras, but did maintain its
annual forecast, helped by the sale of a chemicals business.
© Thomson Reuters 2012