Japan’s Panasonic posted more than the expected 44 percent slide in its third-quarter operating profit on Wednesday, hit hard by rising costs for raw materials, material shortages and declining internal sales for machinery.
Panasonic has sought to reduce its reliance on low-margin consumer electronics and equipment, shifting its focus to automotive batteries, manufacturing equipment, components and, most recently, supply chain management services for Tesla.
That said, consumer and household appliances, which benefited from increased home sales during the coronavirus lockdown, are still responsible for a large portion of revenue.
Operating profit for the three months to December 31 fell to JPY 73 billion (approximately Rs. 4,772 crore), much lower than a referential consensus estimate of JPY 107 billion (approximately Rs. 6,994 crore).
The industry body said the profit margin in the division, where its consumer and household appliances business is concerned, was due to rising prices of iron, copper and other materials.
Other segments that have had to adapt to rising material prices and material shortages include its automotive business, which manufactures sensors and other car components, and its power business, which has recently benefited from increased battery sales to Tesla.
Its decade-old partnership with Tesla is benefiting from increased sales of electric vehicles since last year. Panasonic is set to begin delivering a new generation of batteries to US automakers that will reduce EV production costs and expand the range of vehicles.
Third-quarter profits also declined by 1 7.1 billion (approximately Rs. 53,068 crore) in asset-related assets and debt revaluations, according to Blue Yander, a U.S. company that uses machine learning to help companies connect warehouses and retailers. . The amount of revaluation was not disclosed.
Panasonic has sold about 400 billion JPY (approximately Rs 26,149 crore) of Tesla shares to fund the acquisition.
Panasonic is stuck with a full-year forecast for its JPY 370 billion (approximately Rs 24,188 crore) annual profit – which is consistent with analysts’ forecasts.
Thomson Reuters 2022