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Matsushita Blames $531-Million Loss on Sale of Stake in MCA

Japan: Electronics firm predicts a return to profitability this year.

May 24, 1996|From Reuters

OSAKA, Japan — Japanese electronics conglomerate Matsushita Electric Industrial Co. said Thursday that it lost $531 million last business year because of its sale of a majority stake in Hollywood filmmaker MCA Inc.

Matsushita, maker of the Panasonic, National and Technics brands, said the loss was because of moves in the foreign exchange market between the time it acquired MCA in 1990 and when it sold an 80% stake to Seagram Co. of Canada in June.

"The group losses are only due to this one-time loss of 164.2 billion yen [$1.53 billion], which occurred because of foreign currency translation adjustments," Matsushita Director Motoi Matsuda told a news conference.

Matsushita, which posted a group net profit of $845 million in its previous fiscal year, also said it expected to return to profitability in the current business year, which began April 1.

The company forecast its group net profit--which includes the earnings of its overseas subsidiaries--would be $1.07 billion in the year ending March 31, 1997.

Matsushita's group net loss for last year was smaller than its own forecast. It had predicted a group net loss of $598 million because of the sale of MCA.

It said export sales suffered mainly from the shift in audiovisual production to overseas. Production overseas grew 20% to $13.7 billion in 1995-96 and was expected to reach $16 billion this year, Matsuda said.

He said that by 2000, overseas production would account for half of total sales, compared with 45% currently.

Fierce price competition, particularly in audio equipment, also narrowed profit margins.

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