Japanese electronics giant Sharp to book extraordinary loss of $555 million

31 December 2008

Japanese electronics giant Sharp Corporation, one of the world's largest LCD makers will book an extraordinary accounting loss of nearly 43.2 billion yen ($555 million) for the financial year ending 31 March 2009, due to decline in the value of its financial investments, particularly from its acquisition of Pioneer.

''It expects an extraordinary loss of nearly Y43.2 billion ($555 million), on certain securities, as their fair market value has declined significantly and is unlikely to recover in the future.'' according to the company press release.

The global recession has badly hit Japanese electronics makers who have traditionally relied on foreign sales of their products. In October, Sharp projected a 44.2-per cent decline in net profit to 60 billion yen for the current financial year.

Its forecast for March ending 2009 ''is currently being examined and will be announced when the outlook becomes clearer,'' Sharp said in a statement.

The statement did not attribute its losses from specific holdings. The losses are presumed to be due to steep decline in the value in Pioneer Corp, which it acquired in December 2007, according to Nikkei business newspaper.

Sharp Corp became Pioneer Corp's largest shareholder with a 14.28 per cent stake. Sharp bought 30 million shares for around 1,385 yen, worth 41.55 billion yen.