JULY 2008 W5 ALERT
Kenwood Books First Quarter Loss of $4.8 Million
Exchange Rate Issues and Inventory Accounting Hit Results Hard
<July 30, 2008><Nikkei-TOKYO>Kenwood Corp. announced today it had a net loss of ¥519 million ($4.8 million at current exchange rate) for its fiscal first quarter of this year. This result represents a significant swing from last year’s profit of ¥556 million.
Sales fell 7 percent to ¥39.4 billion and operating profit dropped 20 percent to ¥953 million.
The company says these results are mainly due to large swings in the currency exchange rate and that when viewed in local currency sales actually grew 1 percent and profits grew 70 percent as a result of cost cutting in the car electronics division.
Results were also impacted by a change in the company’s accounting procedures which resulted in another ¥700 million write-off impacting the bottom line.
Kenwood’s report comes on the heels of yesterday’s report from Victor Company of Japan (JVC) who yesterday reported a sales decline of 17 percent to ¥132.7 billion and a net operating loss of ¥1.2 billion. The company said their results were largely “according to plan” as they discontinue operations and restructure their operations.
JVC expects to report a return to profitability in the July-September quarter.