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Japan-Update

Sharp likely bled less red ink under Foxconn in fiscal 2016

Technology group on track to return to the black this year

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Sharp has been carrying out structural reforms led by parent Foxconn.   © Reuters

OSAKA -- Sharp will likely report a group net loss of around 25 billion yen ($227 million) for the fiscal year ended March 31, surpassing expectations under Taiwanese parent Hon Hai Precision Industry.

The red ink would be less than the 27.1 billion yen forecast and mark a big improvement over the 255.9 billion yen loss of fiscal 2015.

Sharp apparently secured a pretax profit of more than 10 billion yen, its first such black ink in three years, compared to a 192.4 billion yen pretax loss the prior year. But impairment charges in the liquid crystal display panel business are seen as a leading factor resulting in the bottom-line loss. Cost-cutting efforts in Southeast Asia and elsewhere abroad could help the Japanese technology group bounce back to its first net profit in four years this fiscal year.

Hon Hai, the Apple assembler known as Foxconn, installed No. 2 leader Tai Jeng-wu as Sharp's president after completing its purchase in August 2016. Tai spearheaded a streamlining effort starting with domestic operations.

Sharp's display devices segment likely logged a second straight quarter of profits in the fourth quarter ended March 31, thanks to lower procurement and logistics costs. Profitability in the energy solutions segment apparently improved on modified purchasing contracts for solar cell materials.

In the health and environmental equipment segment, sales are brisk for products including the Healsio Hotcook, an automatic cooker that does not use water. Sharp releases its fiscal 2016 earnings Friday.

(Nikkei)

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