Japanese giants collective huge loss: adjustments are in full swing

After Toshiba, Sharp, Sony and Hitachi released their 2011 results, Panasonic also announced the third quarter and the year-end results as of March 2012. Data released during the week showed that Japanese electronics companies collectively fell into the bottom of performance decline. The financial report shows that Matsushita’s net profit is expected to reach 780 billion yen, which is the largest loss record in the history of the company.

With the unfavorable earnings figures, Japanese companies also began a round of structural adjustment and coaching movement. However, analysts inside the industry pointed out that this round of adjustment is not caused only by performance. In the past two years, Japanese companies have undergone a transition. Adjustment can be seen as a strategic adjustment during the transition period. "In fiscal year 2012, the data of Japanese companies may be worse, but it is too early to conclude that Japan has lost."

Losses have hit record highs Matsushita provided data showing that during the nine months from April to December 2011, the net profit loss was 333.8 billion yen, compared with a profit of 114.7 billion yen in the same period of last year. Panasonic lowered its forecast for fiscal year 2011 due to worsening performance in the third quarter. It is expected that the sales amount will be lowered from 8.3 trillion yen to 8 trillion yen, compared with 8.7 trillion yen in the same period of last year; net profit will be from a loss of 420 billion yen. It was reduced to a loss of 780 billion yen, compared with a profit of 74 billion yen in the same period of last year.

Matsushita said that the large-scale floods in Thailand last October caused extensive impact on the supply chain, coupled with the global economic recession caused by the debt crisis in Europe and other reasons, with digital products as the center, sales are expected to be greatly reduced. Although a thorough reduction of the fixed fee for the above-mentioned state of emergency has been implemented, it is still unable to compensate for the effect of the reduction in sales, and it is expected to reduce the revenue. In addition, Panasonic’s pre-tax profit includes provisions for additional structural reforms such as impairment losses on acquired assets.

It is not only Panasonic that has lost a lot of innovation. Sharp also expects a loss of 290 billion yen in fiscal year 2011, which will be the worst annual loss since the establishment of the company in 1912, the highest in a hundred years. Sony lost 9.17 billion yen in the third quarter of fiscal 2011, and had a deficit of 220 billion yen for the full year. Although Hitachi made a profit, in the third quarter, net profit was 34.28 billion yen, a sharp drop of 45% compared with 620.9 yen in the same period of last year. Net profit for the fiscal year 2011 was 200 billion yen, down 16% year-on-year. Toshiba’s third-quarter loss was 10.6 billion yen, and its operating profit forecast for fiscal 2011 was lowered to 200 billion yen from its previous 300 billion yen.

As for the reasons for the loss, several giants mentioned the impact of the appreciation of the yen, the global economic recession and natural disasters.

Luo Qingqi (microblogging), senior director of Pall Consulting Limited, said that the reason for the collective decline in Japanese corporate performance was first of all the high exchange rate of the Japanese yen, followed by the global economic recession; third, the impact of the Japan earthquake and flooding in Thailand; and then South Korea. The competitive pressures brought by Chinese companies.

Judging that Japan’s manufacturing defeat has been unfavorably disclosed earlier, Japanese companies have also announced restructuring and personnel restructuring plans. Hitachi announced that it will reorganize its organizational structure starting from April 1, 2012, and will reorganize its business scope into five groups: infrastructure group, information technology group, power system group, construction machinery group and high-functional materials. group. In addition, the newly established "Hitachi Group China Asia Pacific President," will be held by Hitachi's current executive vice president and head of the group's international business, Sen Heguang. Hitachi hopes to achieve a significant increase in operating efficiency through the establishment of a new business system and continuous reforms afterwards. Previously, Hitachi had decided to stop the television production business and outsource all television production.

Sony proposed a coaching change. Howard Stringer, who had been in charge of Sony since 2005, was replaced by Japanese man Hirai.

Matsushita’s president, Masao Ohtsuo, declared that he will revive his performance with the reform of the sluggish television business as the center. As planned, Matsushita will complete the integration and integration work of Matsushita Electric Industrial, Matsushita Electric Works and Sanyo on April 1.

Luo Qingqi said that the issue of the yen exchange rate will be difficult to resolve in the short term, and that the general trend of weak demand in 2012 will not change. In this case, the above adjustment will hardly be an immediate improvement in Japanese corporate performance in 2012.

In fact, in the deteriorating operating environment, Japanese companies are also firmly promoting the transition. In the past year, Hitachi made efforts to shift from the traditional consumer electronics industry to the social infrastructure such as power, railway systems and information technology. Hitachi believes that these areas have even greater potential for development. Panasonic has increased its energy-based industrial planning and clearly established the life electronics industry, component industry and system solutions industry as the three pillar industries.

Luo Qingqi said that just at the bottom of his performance, this round of adjustments by Japanese companies could easily be mistaken for unfavorable results. “This can only be part of the reason, but this round of adjustment shows that its measures are not just to reduce costs. The industrial sector is undergoing adjustments, and the operating pressure of traditional electronic industries has increased. The adjustment of Japanese companies is a strategic choice in the transition period.”

Luo Qingqi also emphasized that Japanese corporate performance is difficult to improve for a relatively long period of time. However, the foundation of its R&D system technology system has not changed and it cannot be judged that Japan has been defeated. "The Hitachi, Sony, Sharp and other companies, especially Panasonic's transformation, will change its operating system. After the economic environment improves, this will have a good imagination."