Sharp rebounds amid profitability challenges
November 13, 2024
Sharp Corporation returns to profit despite sectoral weaknesses and foreign exchange impact.
Sharp Corporation reported a modest but symbolic return to profitability in the first half of fiscal 2024, marking a positive shift for the Japanese tech giant following sustained operating losses since 2022. Net sales, however, slipped by 5.3% year-on-year to ¥1,096.4 billion ($7.3 billion/ €6.8 billion), highlighting ongoing pressures from weak demand across key device segments and a weakening yen.
The Group’s Brand Business led the resurgence, buoyed by a 21.4% revenue surge in the Smart Office segment, which contributed substantially to Sharp’s stabilising bottom line. This growth was propelled by robust sales in multifunction printers (MFPs) and information displays in Japan, the United States, and Europe. In particular, Sharp’s premium enterprise offerings, such as high-end PCs and lifecycle management services, drew significant customer uptake. Operating profit for Smart Office nearly doubled year-on-year to ¥18.2 billion ($122 million/ €113 million), achieving an improved margin of 5.5%.
The results also underscored the importance of structural reforms initiated within Sharp’s underperforming Device Business. While Display and Electronic Device segments faced revenue contractions of 20.5% and 39.1%, respectively, the Group’s efforts in cost reduction and resource optimisation began narrowing segment losses. Structural cost savings trimmed Display Device’s operating loss to ¥7.6 billion ($51 million/ €47 million), a marked improvement against prior deficits, as Sharp scaled back production at its Sakai Display Product plant and prioritised automotive and semiconductor markets.
Despite these operational gains, Sharp faced mounting pressure from unfavourable foreign exchange movements. The yen’s depreciation against major currencies shaved ¥5.7 billion ($38 million/ €35 million) off Sharp’s ordinary profit, exacerbating what could have been stronger margins across its more profitable units. In turn, this currency drag on profits tempered Sharp’s quarterly ordinary income to ¥1.4 billion ($9.4 million/ €8.8 million), reflecting a 51.6% decrease year-on-year.
To counter exchange rate volatility and an anticipated further slowdown in device demand, Sharp is actively exploring asset-light initiatives in semiconductor and AI data centres.
Looking forward, Sharp held its full-year revenue forecast steady, anticipating ¥2,100 billion ($14.1 billion/ €13 billion) in sales despite headwinds.
Categories : City News
Tags : Business Financials Profit Sharp Technology
