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February 13, 2012 10:57 am
Olympus, the scandal-hit Japanese optical equipment maker, said it expected to suffer a Y32bn net loss this year owing to asset writedowns at its struggling camera division and a one-time tax adjustment.
The projected loss is unrelated to accounting problems that came to light last year, Olympus said. It was the first time the company issued earnings guidance since it was discovered in October that it had concealed bad investments dating from the 1990s.
Olympus had already been forced to restate the value of its assets as well as earnings from past years because of the accounting regularities.
Shuichi Takayama, president, said the scandal had not deterred consumers of Olympus’ products, including the medical endoscopes that generate the bulk of its profits.
The company expects to earn an operating profit – calculated before the write-offs and tax adjustment – of Y360bn. That would be down just 6 per cent in a year when many Japanese technology companies are projecting much larger declines, owing to the strength of the yen and supply disruptions from natural disasters.
In the medical segment, Olympus estimates that it will post a 22 per cent rise in operating profit for the fourth quarter to the end of March.
Olympus has struggled to make money in the competitive market for digital cameras, however, and plans to writedown the value of assets related to that business by Y12bn.
It is also taking a Y20bn charge related to deferred tax credits that it had previously been counting as income.
Other Japanese companies, including Sony, have been forced to make similar adjustments this year: the value of the credits is linked to expected future tax bills, and has fallen as a result of changes to Japan’s corporate tax rate and a deteriorating profit outlook.
Olympus is seeking potential partners to help it rebuild after the scandal, and may sell a stake in itself to a rival. But on Monday, Mr Takayama reiterated that no decision would be made until new management takes over following a shareholder meeting in April.
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