EXCLUSIVE: Sharp OZ Drops $22M In Revenue After Selling HQ for $31M
Sharp Corporation Australia has announced a $22 million decline in revenues, they’ve also announced that the company’s headquarters in New South Wales has been sold for $31 million.
The decline in revenue has been attributed to a slump in sales of the company’s consumer electronics and appliance business.
Despite the slump the company has reported a $3.8 million profit versus a $1.7 million loss in 2015. The profit was primarily delivered by the company’s copier division.
Giuseppe (Joe) Costantino, the director responsible for sales and marketing in the consumer electronics and appliance business has not commented for this story.
On Friday iPhone assembler Foxconn Technology Group completed its $3.8 billion deal to buy electronics maker Sharp setting the stage for Taiwanese tycoon Terry Gou to rework the troubled Japanese company.
Last month ChannelNews broke the news that Sharp Australia were moving from their Huntingdale location to cheaper offices in North Ryde.
Recently arch rival in the Japanese appliance market, Hitachi, announced that they were re-entering the Australian appliance market as speculation mounts that the new owners of Sharp will exit the Australian appliance market unless local management can deliver a profitable business proposition.
ChannelNews can reveal that on 23 April 2016, Sharp Corporation of Japan issued an approval for the Company to sell the land and properties at 1 Huntingwood Drive, Huntingwood, NSW.
The following month a mutual agreement was signed between the Company and GPT Hunter Custodian Pty Limited who agreed to by the Sharp asset for $31,500,000.
In a statement made to the Australian Companies and Securities Commission Sharp Corporation Australia advised that following the 66% acquisition of the parent company by Foxconn Technology Group any future financial years have not been included in their latest financial report “Because disclosure of the information would most likely result in unreasonable prejudice to the consolidated entity”.
On Friday the Osaka-based Sharp said it received a US$3.81 billion cash infusion from Foxconn, formally known as Hon Hai Precision Industry Co.
Sharp’s chief executive, Kozo Takahashi, immediately resigned with Mr. Gou’s right-hand man, Tai Jeng-wu, set to step in to run the problematic company who is struggling to turn around their TV and display business.
Foxconn, which prospered by assembling products such as Apple’s iPhone, believes that the acquisition of a controlling share in shop delivers them an opportunity to expand into branded electronic goods and build a bigger business with Apple.
Sharp currently supplies display panels for major smartphone makers including Apple.
ChannelNews understands that at least two Australian distributors of appliances have approached Foxconn in Taiwan with a view to taking over distribution of Sharp products in Australia.
Analysts claim that with the deal complete, Sharp faces changes. Mr. Gou has improved profitability at a Sharp display factory in Japan that he has operated for several years through a joint venture, and he has signalled job cuts are in store at Sharp.
Also, analysts say melding the corporate cultures may be a challenge as Sharp employees come to terms with the army-like atmosphere of their new Taiwanese parent.
Sharp is known for innovative consumer-electronic products such as microwave ovens, air purifiers and, more recently, a robot-smartphone hybrid called Robohon.
But it ran into financial trouble as its consumer-electronics business encountered new Asian competition and as it became too reliant on the volatile display-panel business for growth. Price pressure from South Korean and Chinese rivals saw Sharp revenues slump.
In Australia Sharp was recently forced to get out of the TV business a move that is set to benefit Philips who recently struck an exclusive deal with JB Hi-Fi and Hitachi, who will next year launch a new TV with a built-in Roku Smart TV capability.
Foxconn hopes to leverage Sharp’s assets to diversify its business portfolio, as its core electronics-manufacturing service offers razor-thin profit margins. When times are good, display panels can offer wider profit margins, and Mr. Gou has said he would accelerate Sharp’s efforts to produce organic light-emitting diode, or OLED, displays up against LG.