Japan Display Inc. said Tuesday it posted a group net loss of ¥101.42 billion ($938 million) in fiscal 2019, a red ink figure for the sixth straight year, due to hefty restructuring costs and weak demand for products.
In a delayed earnings report due to the new coronavirus outbreak, the struggling panel-maker logged a consolidated operating loss of ¥38.54 billion in the business year through March, on sales of ¥504.02 billion, down 20.8 percent from a year earlier.
The smartphone display supplier to Apple Inc. did not present a detailed business outlook for fiscal 2020, but just said its sales are expected to drop 15 to 20 percent from a year earlier due largely to falling demand caused by the virus pandemic.
“The coronavirus (pandemic) disappointingly changed our earnings outlook” as the display-maker is expected to incur a loss again in the April-June period, said Japan Display Chairman Scott Callon in an online press conference. The company’s future “will be bright in the next two, three or five years,” he added.
Japan Display logged a positive net worth of ¥53.36 billion, with its capital adequacy ratio at 13.1 percent, compared with minus 25.9 percent as of the end of December.
The company had incurred restructuring costs of ¥67.18 billion, including massive write-downs of its idle facilities and spending related to its voluntary early retirement program.
The maker said its business improved in the January-March quarter, posting a group net profit of ¥9.47 billion, thanks to its cost-cutting efforts introduced in the first half of the business year and a special profit from selling its stake in Joled Inc., an advanced display manufacturer.
“Our profitability improved in the second half of the business year despite weak sales and the impact of the coronavirus pandemic,” said Japan Display CEO Minoru Kikuoka.
To improve its balance sheet, the embattled display-maker received a capital injection of ¥50.4 billion in March from Japanese private fund Ichigo Asset Management Ltd., while the state-backed fund INCJ Ltd. swapped its loans worth ¥102 billion for preferred shares as part of its bailout plan.
Japan Display said it plans to turn around its business by entering into the health care market, with its cutting-edge products such as bendable sensors that can detect biometric information including fingerprints and pulse waves.
Your news needs your support
Since the early stages of the COVID-19 crisis, The Japan Times has been providing free access to crucial news on the impact of the novel coronavirus as well as practical information about how to cope with the pandemic. Please consider subscribing today so we can continue offering you up-to-date, in-depth news about Japan.