Pioneer logs biggest-ever annual loss

Electronics maker Pioneer Corp. announced Wednesday a group net loss of ¥130.53 billion, its biggest ever, for the 2008 business year that ended in March, remaining in the red for the fifth consecutive year due to a stronger yen and languishing demand for plasma display televisions.

Looking ahead, Pioneer expects to reduce its loss to ¥83 billion in the current business year and recover profitability by fiscal 2010 by implementing aggressive restructuring measures, including 10,000 job cuts and a withdrawal from its money-losing flat-panel display business.

The fiscal 2008 net loss compares with a year-earlier loss of ¥19.04 billion.

In the reporting year, Pioneer also booked its worst-ever operating loss, of ¥54.53 billion, compared with a year-earlier profit of ¥9.22 billion.

Its sales dropped 27.8 percent to ¥558.84 billion as consumers cut back on buying car audio products, plasma display TVs and DVD drives as the global recession deepened.

The stronger yen also eroded the company’s profits made overseas with the foreign-exchange rate averaging ¥100.54 to the dollar and ¥143.48 to the euro, compared with ¥114.28 and ¥161.53, respectively, in the previous fiscal year, it said.

The company also plans to forgo a dividend payment for fiscal 2008, which will mark its first nonpayment of an annual dividend since it went public in 1961. It paid ¥7.50 per share for fiscal 2007.

“The current sour conditions are expected to continue throughout the first half of this business year, but we anticipate a recovery trend to emerge from the second half,” President Susumu Kotani told reporters in Tokyo.

In fiscal 2009 through next March, the company is projecting that its operating loss will be trimmed to ¥33 billion while sales are expected to drop a further 24.8 percent from fiscal 2008 to ¥420 billion.

In addition to job cuts and the concentration of resources on profitable businesses, Pioneer said it also plans to cut capital spending by 45 percent to ¥25 billion in the current business year and anticipates a total reduction of ¥50 billion in fixed costs through restructuring.

“I believe we will definitely be able to return to the black from the next business year,” Kotani said, adding the company’s car electronics division will return to profit by the latter half of fiscal 2009.

In its medium-term business plan announced in April, the company forecast a group operating profit of ¥15 billion and a net profit of ¥8 billion in fiscal 2010.

Pioneer has been studying various measures to strengthen its financial standing and recently said it will raise ¥2.5 billion by issuing shares to Honda Motor Co., which buys its car navigation systems.