Japan\'s Panasonic set for record $10.2 bn loss

Japan\'s Panasonic on Friday warned it would see its worst-ever net loss of 780 billion yen ($10.2 billion) for the year to March, blaming the strong yen, flooding in Thailand, and acquisition costs. The electronics giant said the huge net loss -- which would be one of the worst ever recorded by any non-financial Japanese company -- was due to one-off costs it incurred to acquire rival Sanyo, among other factors. \"We expect a sizeable decline in sales due to the impact of massive flooding in Thailand last October on broad supply chains, together with a global economic slowdown triggered by the European debt crisis,\" the firm said. \"Although the company carried out streamlining efforts rigorously in this extreme situation, it is not expected that the company will be able to offset the decline in sales,\" it added in a statement. Panasonic has long suffered major losses in its television business and its debt soared due to the Sanyo purchase. A torrid year for the firm saw it downgraded by Moody\'s and announce a plan to reduce headcount by 17,000 people. Company president Fumio Otsubo admitted the situation was serious. \"We feel the gravity of our responsibility for reporting the massive loss,\" he told a news conference. \"We have been carrying out our painful reforms, and then came the quake disaster, flooding and a sudden rise in the yen. As a result, we reported these tough results,\" he said. He did not respond directly when asked if he was planning to resign, saying: \"For us, the important thing is to firmly achieve profit recovery for the fiscal 2012 year. That\'s all.\" The prediction of a huge loss is a stark contrast to Panasonic\'s net profit of 74 billion yen in the year to March 2011, and its first forecast for the current year, which was for a 30 billion yen profit. The Osaka-based company revised downward its annual sales forecast to 8.0 trillion yen, from 8.3 trillion yen earlier. Operating profit for the year is now seen at 30 billion yen, compared with 130 billion yen projected earlier. But Hiroshi Sakai, chief economist at SMBC Friend Research Center, said that \"recovery is expected\" once the company had finished costly procedures linked to the Sanyo acquisition. Panasonic is taking an additional 250 billion yen charge for acquisition-related goodwill impairment in the annual figures. Sakai said: \"It faced sizeable contingencies this year such as the Thai floods and the great earthquake disaster, whose impact is expected to subside.\" But he added: \"Its business environment is expected to remain severe due to a slump in its main businesses, notably the TV and electronic devices sectors.\" In the third quarter, Panasonic said that while Japan had seen signs of recovery after the March 2011 disasters, the economy was \"still severely affected by the shortage in electricity distribution after the disaster, the global economic slowdown, appreciation of the yen\". The company posted a net loss of 333.82 billion yen for the nine months to December, reversing a 114.70 billion yen profit in the corresponding period a year earlier, partly due to write-downs on the value of deferred tax assets. Operating profit for the period plunged 85.0 percent to 39.54 billion yen on sales of 5.97 trillion yen, down 10.3 percent.