Panasonic said Thursday its net profit fell 9.6 percent in the fiscal year that ended in March, as its solar energy business struggled and a stronger yen pushed down overseas earnings.
The electronics maker said its group net profit fell to ¥149.36 billion ($1.3 billion) from ¥165.21 billion in the previous year as demand for solar panels and storage battery units lagged in Japan.
A stronger yen dents income earned overseas when repatriated and undermines the price competitiveness of Japanese-made products abroad. A U.S. dollar bought ¥108 on average, compared with ¥120 the previous fiscal year.
Group sales fell 3.7 percent to ¥7.34 trillion, despite strong sales in home appliances in Japan and the acquisition of U.S. refrigeration firm Hussmann last April. Group operating profit rose 20.2 percent to ¥276.78 billion as costs including legal fees fell.
The company expects group net profit for the current year to rise 7.1 percent to ¥160 billion on sales of ¥7.8 trillion, up 6.2 percent.
Company President Kazuhiro Tsuga said at a news conference in Tokyo he expects automotive parts such as electric car batteries to be the main driver of growth, with sales in the segment expected to reach ¥2 trillion in the fiscal year ending in March 2019.
“There will be visible growth in this field, both revenue- and profit-wise from the latter half of fiscal 2017,” he said.
Panasonic supplies batteries to U.S. electric-car maker and energy company Tesla and the two jointly run the Gigafactory in Nevada.
“Once mass production of the Model 3 electric car starts, demand in North America will expand at an incredible pace,” Tsuga said. He also alluded to plans to build a battery factory in Europe to meet future demand for electric vehicles there.
Panasonic will also manufacture the panels used in Tesla’s Solar Roof, which it hopes will help galvanize its loss-making solar energy business.
Panasonic has been aggressively expanding in fields other than consumer electronics amid stiff competition from Asian rivals such as Samsung Electronics. Such fields include home renovation and elder care services.
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