Competition, Yen Hit Matsushita FY99 Results

BOSTON (05/10/2000) - Strong sales of DVD players, cellular telephones and electronic components were not enough to outweigh the effects of increased competition and the strong Japanese yen, Matsushita Electric Industrial Co.

Ltd. said today announcing financial results for its 1999 fiscal year.

The company, which is best known for its National and Panasonic brands, reported that for the fiscal year ended March 31, 2000, group operating income was 159.1 billion yen (US$1.45 billion), a 17.9 percent decline from the previous year.

The company also reported a 4.5 percent fall in group sales to 7.30 trillion yen for the year. Sluggish demand in Japan, price competition overseas and the strengthening Japanese yen were blamed for the fall.

Domestic sales were 1 percent lower at 3.70 trillion yen, while overseas sales were down 7 percent to 3.60 trillion yen. The company attributed the sharply lower overseas sales to the strength of the Japanese yen and noted sales in markets outside of Japan climbed 3 percent on a local currency basis.

The company reported that pretax income jumped 8.1 percent to 218.8 billion yen, the latter thanks largely to a one-time gain of 58.6 billion yen from sales of shares in German manufacturing venture. Net profits were 99.7 billion yen -- a more than fivefold gain on last year's figure, which was hit by a special charge.

In its major product sectors, the company said a slowdown in sales of televisions and VCRs contributed to an 8 percent fall in consumer electronics sales to 3.01 trillion yen. Surging demand for DVD players was a highlight of the sector.

Industrial product sales fell back 4 percent to 2.76 trillion yen, although demand for information and communications equipment was strong. The general worldwide fall in the price of computer peripherals such as monitors and displays hit the sector hard, said the company.

In the components business, Matsushita said sales jumped 3 percent to 1.53 trillion yen after stronger demand for semiconductors and liquid crystal displays.

For the current year, the period to March 31, 2001, Matsushita said it expects to see group sales to be virtually unchanged at 7.3 trillion yen. A slow economic recovery in Japan, continued yen appreciation and increased competition overseas will be major factors in the year, it said. Group operating profit is predicted to rise 19 percent to 190 billion yen, pretax income to fall 9 percent to 200 billion yen and net income to climb 2 percent to 102 billion yen.

Matsushita Electric Industrial, in Tokyo, can be found online at http://www.mei.co.jp/.

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