Panasonic Corp.’s group net profit in the fiscal first half declined 11.2 percent from a year earlier, as sluggish sales in China — amid its prolonged trade war with the United States — overshadowed a boost in domestic housing-related businesses.
The electronics maker said Thursday it posted a net profit of ¥100.92 billion ($928 million) in the first half, which ended Sept. 30. Its group operating profit stood at ¥140.29 billion, down 28.1 percent, while sales fell 4.1 percent to ¥3.84 trillion.
“We expected the negative impact from the U.S.-China trade frictions to moderately ease in the second half of this fiscal year, but it has become difficult to see it that way,” the company’s chief financial officer, Hirokazu Umeda, told a news conference Thursday in Tokyo.
The Osaka-based manufacturer said its operating profit was hit by deteriorating market conditions in China that resulted in sluggish sales of sensors, motors and automotive parts, while it also saw increased development costs for electric vehicle charging equipment for Europe. Its TV operation also faced intense price competition in Europe.
The group’s housing business saw growth in operating profit and sales due to stable demand for water-related equipment and building materials.
“In our housing and house appliance businesses, we saw some rush demand ahead of the consumption tax hike” from 8 percent to 10 percent on Oct. 1, Umeda said at the news conference, adding that the demand added roughly ¥20 billion to the company’s sales.
“Going ahead, we need to see how consumer spending will be affected,” he said. “For the first week after the tax hike, we saw a 30 percent year-on-year (sales) fall in some operations. But that recovered toward the end of October so we need to watch the effect carefully.”
For the fiscal year that will end in March, Panasonic maintained its net profit outlook at ¥200 billion and its operating profit forecast at ¥300 billion, expecting cost-cutting measures to make up for sluggish sales in China.
The company cut its sales projection to ¥7.70 trillion from ¥7.90 trillion after adjusting its assumed exchange rates for the yen against major currencies.