Japanese executives' pay cut as profits fall

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The Independent Online
TOKYO (Reuter) - Thirty executives at Matsushita, the giant Japanese consumer electronics company, will have their pay cut by 10 per cent from November to next March because of a plunge in profits.

Matsushita, whose brands include Panasonic and Technics, reported halved profits of Y52.32bn ( pounds 270m) in the six months to 30 September against Y107.30bn in the same period a year earlier. Sales fell 7 per cent.

Analysts say the sales drop could be more worrying than the profit figure, because it shows that the company has become a victim of the malaise hitting the industry - a dearth of new products that consumers want to buy.

Matsushita also cut its profit forecast for the year to 31 March 1993, from Y197bn to Y102bn against Y196.41bn in 1991/92.

The company revised down its capital spending plan for 1992/93 from Y100bn to Y80bn. Actual capital spending the year before was Y156.9bn. In the first half of 1992/93, it spent Y42.5bn.

Japan's economic slowdown has hit electronics companies hard. Hitachi's net profit fell 46 per cent to Y25.02bn. Nobuji Kamachi, senior executive managing director, said a one yen fall by the dollar took Y700m off Hitachi revenues.

Exports have traditionally offset domestic downturns for Japan's electronics sector, but a first-half exchange rate averaging 125 yen to the dollar quashed such hopes this year.

Fujitsu announced its first group loss when it released results for the first six months of its fiscal year.

Fujitsu, whose 1990 purchase of 80 per cent of Britain's ICL made it the world's second-biggest computer maker, posted a net loss of Y19.3bn for the six months to 30 September, but said it would be in profit for the full year.

NEC, Japan's biggest personal computer maker, saw first-half profits plunge 72 per cent to Y10.12bn, with revenues down 7 per cent.

Japan's PC sales have slumped in the past year and increased competition from foreign makers is set to cut margins further.