Business / Corporate

Canon suffers first quarterly loss amid pandemic

JIJI

Canon Inc. on Tuesday reported a group net loss of ¥8.8 billion for April to June due to the fallout from the coronavirus pandemic, suffering the first red figure on a quarterly basis since it started earnings disclosure in 2001.

The April-June loss came against a profit of ¥34.5 billion in the same period a year before, reflecting sluggish sales of office equipment and other products amid the pandemic.

In the second quarter of 2020, the company's sales slumped 25.7 percent from a year earlier to ¥673.3 billion, with sales of office machines weak as many people worked from their homes and demand for cameras sluggish amid stay-at-home restrictions around the world.

For the full year, the company forecast a net profit of ¥43 billion, down 65.6 percent from the previous year. Operating profit is projected at ¥45 billion, down 74.2 percent, and sales are estimated at ¥3.08 trillion, down 14.3 percent.

The company left year-end dividends undecided, while planning to halve half-year dividends to ¥40 a share, the first dividend decrease in about 33 years.

Canon "expects earnings to start picking up in the second half of the year, though at a moderate pace," Chief Financial Officer Toshizo Tanaka said in a conference call.

The pandemic is estimated to push down Canon's annual sales by some ¥480 billion and operating profit by about ¥170 billion, he said.

In the January-June first half, Canon's sales fell 17.8 percent from a year before to ¥1.46 trillion. Operating profit plunged 81.9 percent to ¥15.1 billion, and net profit dived 80.1 percent to ¥13.1 billion.

The company implemented structural reform measures worth ¥15 billion in its office equipment and camera operations, including job cuts, in response to the pandemic.

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