Hitachi would try to improve its profitability by shifting resources to infrastructure sectors like telecommunications and power systems, as it expects a $7 billion (Dh25.7bn) annual loss in the year just ended, its new chief executive said.
Hitachi said yesterday that a recovery in earnings is unlikely until 2010 as it grapples with a global economic downturn, and that it may raise capital or apply for state funds to bolster its fast-deteriorating finances.
Balance sheets at many Japanese electronics makers, who shoulder large initial investments, are quickly worsening as demand shrinks and prices fall for their technology-packed products, prompting some to consider seeking government help.
Takashi Kawamura, who took the helm at Japan's biggest industrial electronics group this month, added that the financial year to March 2010 will remain tough, especially for its mainstay electronics and auto-related businesses. He warned that turning around its sprawling operations could be time-consuming.
"Our past strategies to expand and to be a conglomerate were successful in some ways ... but in the recent business environment, there should be other ways to revive our financial health," he told a briefing.
Kawamura said he wanted to shift the company's focus away from being a conglomerate towards its "social innovation operations", which include industrial and transportation systems, to generate stable earnings. As a worldwide economic slump makes consumers reluctant to spend on TVs and cars, Hitachi is considering turning to a new scheme now before parliament that would make public money available to companies hit by the global financial crisis.
Chip maker Elpida Memory said it will consider applying for state support, while analysts said Toshiba Corp may also need to seek public money. Kawamura said raising capital could be another option for Hitachi. Hitachi has said that it planned to cut 500 billion yen in fixed and material costs this year.
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