Olympus losses, capital ills hasten hunt for ally

Kyodo

Olympus Corp. hopes to select a capital and business tieup partner soon, a company executive said Thursday, after the scandal-hit company’s net loss widened and capital ratio deteriorated in the last quarter.

Announcing financial results for the April to June period, Olympus said its group net loss ballooned to ¥4.46 billion from ¥1.42 billion a year earlier, while the strong yen slashed its capital adequacy ratio to 2.2 percent as of June 30 from 4.6 percent at the end of March.

The camera and medical equipment maker, which saw its reputation shredded by an investment loss coverup scandal, attributed the net loss to the yen’s appreciation and a one-off payment to resolve a lawsuit filed by ousted CEO Michael C. Woodford.

Olympus said its group operating profit plunged 59.6 percent from a year earlier to ¥2.12 billion on group sales of ¥189.54 billion, a decline of 4.5 percent.

“We feel a growing sense of crisis” as the company’s capital ratio continues to deteriorate, Senior Executive Managing Officer Yasuo Takeuchi said at a news conference in Tokyo.

“As we have received (alliance) proposals from several companies, we will consider them seriously and make a decision as early as possible,” Takeuchi said.

But he stopped short of setting out a specific time frame.

Last month, medical equipment producer Terumo Corp. said it had proposed integrating its management with Olympus through a holding company, intensifying the battle to form a business and capital alliance with the struggling company. Sony Corp. is considered to be leading the race.

Olympus maintained its annual earnings outlook through next March, projecting a group net profit of ¥7 billion and group operating profit of ¥50 billion on sales of ¥920 billion.