Sharp Wallows, But There Is “Hope” As Profits Return
Sharp who are struggling to get traction in Australia and are now shopping for a new local sales manager for their appliance business, is targeting its first global operating profit in three years following the Japanese Companies acquisition by Foxconn, its new Taiwanese owner.
Last week while in Taiwan I was told by Foxconn management that they are “aware” of the” poor performance” of their Australian operation in particular, in the consumer electronics and appliance business.
Foxconn executives also said that they could renter the Australian TV market in the future.
Tai Jeng-wu, the new president of Sharp said he would review every aspect of the way business was done at the struggling Japanese electronics maker tries to implement a speedy turnaround.
Just two months after completing the deal, the Osaka-based company said last night that it expected to report an operating profit of ¥25.7bn in the fiscal year through March, beating analyst forecasts of ¥12.9bn. The rebound followed restructuring involving job cuts and withdrawal from the North American television market. Revenue is forecasted to fall 19 per cent year-on-year to ¥2tn.
Foxconn, formally known as Hon Hai Precision Industry, agreed in March to pay $3.7bn for a two-thirds stake in Sharp, giving the Apple assembler a century-old electronics brand and the technology know-how that pioneered solar panels and liquid crystal displays.
The Company is also in discussions with Apple re the supply of OLED panels for future Apple products.
The Japanese group, which currently supplies smartphone displays to Apple, will need more capital to invest in the development of OLED screens to compete against South Korean and Chinese rivals. Mr Tai acknowledged the limits to Sharp’s resources and remained cautious about the future of OLED screens, but promised to back its investment in the technology.
Sharp said it expected to return to profit on the net level by the next fiscal year, with Company executives stressing that the group can cut costs by utilising Foxconn’s distribution channels, logistics network and purchasing power.
It projected an annual net loss of ¥41.8bn, smaller than the loss of ¥45.4bn reported during the fiscal first half and a loss of ¥256bn in the 2015-2016 fiscal year.