Panasonic profits plunge, Zatec production stops

Panasonic, which has produced liquid crystal display (LCD) panels in Zatec in the north-western region of the Czech Republic, since 2007, "is winding down its activity in the Triangle industrial park," CTK quoted spokesman Helena Sukova as saying.

She said the operation would be halted for "strategic reasons" and that production from a plant in Malaysia would wind down as well because Panasonic wants to focus on small-format panels from now on.

The plant in Zatec, about 80km from Prague, has supplied panels to another Czech-based Panasonic plant that makes TV sets. It will switch to using screens produced by other suppliers, Sukova said.

The decision comes on the heels of an announcement that Panasonic expects to record a $9.6bn loss this year as the company undergoes a major overhaul of its troubled activities.

Apart from the global difficulties, Panasonic's television business has suffered from falling prices owing to stiff competition from overseas rivals.

The company announced a major restructuring of its LCD manufacturing division and is reportedly considering shifting all of its mobile phone handset production to other regions because of high costs in Japan.

Reports said that Panasonic would abandon its European smartphone business over the next several months.

Last month Moody's Panasonic's credit rating citing the firm's weak profitability and high debt.

In a separate statement, Panasonic said it would lose ¥765bn ($9.6 billion) in the year to March, close to its record loss last year and a huge reversal of an earlier forecast for a profit.

The Japanese electronics giant, which had earlier said it expected to post a net profit of ¥50bn in the fiscal year to March, also lowered its annual sales forecast to ¥7.3tn from ¥8.1tn as it undergoes a massive restructuring.

The Osaka-based firm said it lost ¥685bn in the six months to September as sales slumped on the back of the global slowdown and high restructuring costs.

Last year Panasonic suffered a record ¥772.2bn loss, one of the worst-ever losses for a non-financial Japanese firm.

The stronger yen, makes Panasonic's products more expensive on foreign markets.

Source: AFP via I-Net Bridge