Sony annual net profit down 36.5%, warns of tough year

Sony did not give a forecast for the year ahead owing to uncertainty caused by the coronavirus outbreak (AFP Photo/CHARLY TRIBALLEAU)
·2 min read

Sony said Wednesday its annual net profit tumbled 36.5 percent on lower revenue from games and electronics products, and warned of a tough year because of the coronavirus pandemic.

Sony said its group net profit came in at 582.2 billion yen ($5.4 billion) for the year that ended in March on lower revenue and the absence of one-off financial gains recorded in the preceding year.

Operating profit fell 5.5 percent to 845 billion yen as sales sank 4.7 percent to 8.3 trillion yen.

It suffered "significant decreases" in sales of electronics products as well as in games and network businesses despite robust demand for image sensors used in cellphone cameras, the company said.

The PlayStation 4 console is in its seventh year and its successor will be launched in late 2020, leaving users inclined to wait for the PS5.

Sales of electronic goods were affected by the coronavirus outbreak, which forced factories to halt production and drag on retail sales, the firm said.

The virus reduced the group's operating profit by 68.2 billion yen, it said.

Games downloads grew but music business income fell as events were cancelled owing to the pandemic.

Demand for image sensors was strong but the virus affected the firm's production as well as sales of its image sensors for smartphones manufactured by other companies in China.

Movie revenue managed to post a rise thanks to 'Spider-Man: Far From Home,' and other smash hits but the outlook is murky.

Selloffs on financial markets also resulted in book losses on Sony's securities holdings, the group said.

"The outbreak hit hard sales of its electronics products and theatre movies, while affecting production lines," said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo.

But the firm faces both positive and negative factors from the pandemic, he added, pointing to increasing demand for game downloads.

"Sales of image sensors remain strong, leading Sony's performance. Demand for image sensors is expected to grow further as high-spec smartphones equipped with multiple lenses are becoming more popular," he added in comments before the earnings were released.

Sony did not release an earnings forecast for the year ahead, saying business uncertainty caused by the disease made it impossible to give reasonable projections.

But consolidated operating profit for the current year to March 2021 is "currently estimated to be at least 30 percent lower than the level achieved in the previous fiscal year", it warned.

Nintendo last week announced a leap in annual sales and profits, fuelled by demand for its popular Switch console and titles, including the blockbuster "Animal Crossing".

Its net profits rose 33.3 percent to 258.6 billion yen in the fiscal year to March on sales of 1.3 trillion yen, up 9.0 percent.

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