Sharp's journey to profitability has taken another hit after it recorded the biggest annual net loss in its 100-year history. As losses totalled ¥545 billion ($5.37 billion) in the year ending March 31, the company also promoted former executive vice president of products Kozo Takahashi to president. Takahashi replaces Takashi Okuda after just a year in charge, with Okuda becoming chairman following approval by shareholders.
For Sharp, it's almost the exact same situation it found itself in last year. The company's financial struggles have been exacerbated by the strong yen, high domestic production costs, foreign competition, and lower demand for flatscreen LCD TVs. Forced to take on more than $3.5 billion in debt between 2011 and 2012, Sharp also agreed to lay off 10,000 employees and sell off overseas assets, including plants in China, Malaysia, and Mexico in order to cut costs.
Sharp finds itself in the same position it did last year
In March, Samsung invested 10.4 billion yen (about $111.6 million) for a three percent stake in the company, giving it access to Sharp's LCD display supply, allowing Sharp to use the cash to expand and improve its TV and smartphone panel production. Moving forward, Samsung looks set to play a bigger role in helping to secure Sharp's future by expanding business with the Japanese display maker.
Despite posting particularly grim financials, Sharp is optimistic about its future. In its next fiscal year, it hopes to bounce back to operating profit, with an initial forecast of ¥80 billion ($786 million). The company will also unveil its three-year rehabilitation plan later today, where it is expected to announce another round of loans and reductions in its workforce.