*NEWS*KONICA MINOLTA 10% WORKFORCE CUT

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*NEWS*KONICA MINOLTA 10% WORKFORCE CUT

 user 2005-11-09 at 10:56:00 am Views: 46
  • #14554

    Konica Minolta Expects Loss, Plans 10% Workforce Cut
    Nov.05
    – Konica Minolta Holdings Inc., a Japanese maker of office equipment
    and digital cameras, slashed its full-year earnings target to a loss on
    costs to cut 10 percent of its workforce and reorganize its
    photographic business.
    Net loss is forecast at 47 billion yen ($399
    million) for the year ending March 31, the company said today in
    statement filed to the Tokyo Stock Exchange. That compares with an
    August forecast of a 23 billion yen profit and 7.52 billion yen net
    income a year ago.
    The company, whose stock is the second-worst
    performer on the Nikkei 225 Stock Average this year, has seen prices
    fall for digital cameras and demand weaken for its photographic film.
    It joins Olympus Corp. and Pentax Corp. in eliminating jobs to cut
    costs amid competition from bigger rivals such as Canon Inc.
    “The
    amount of loss forecast for the year is a surprise,” said Yoji Takeda,
    who oversees $300 million as head of Asian equities at RBC Investment
    Management (Asia) Ltd. in Hong Kong. “Restructuring and job cuts are
    the right steps and offer hope of recovery.”
    The Tokyo-based
    company, set up after Konica Corp. and Minolta Co. merged in 2003,
    plans to eliminate 4,000 of its about 33,000 jobs. The cuts will be
    carried out in “about a year,” President Fumio Iwai said at a news
    conference.
    Restructuring costs will amount to 90 billion yen this
    year, said the company, which today said it doesn’t plan to pay an
    annual dividend.
    Smaller Photo Unit
    Konica Minolta aims to reduce
    the size of its photographic division as it shifts focus to office
    equipment and other businesses. The company had expected reorganizing
    the photo unit would cost 34 billion yen in four years to March 2009,
    according to a earlier restructuring plan.
    “With the lack of demand
    for film and photo printing, we just don’t see any potential for
    growth,” Iwai said. “Eventually, we want to shrink the photographic
    segment to below 100 billion yen in terms of annual sales.”
    The
    company today cut its sales forecast for the photographic unit, which
    sells digital cameras, film and printing paper, to 185 billion yen from
    an earlier target of 230 billion. The segment is expected to have an
    operating loss of 5 billion yen this year.
    In the six months ended
    Sept. 30, the unit’s sales fell 25 percent to 111.3 billion yen from a
    year earlier, and had a 719 million yen operating loss.
    Konica
    Minolta said today it shipped 1.17 million digital cameras in the first
    half, including 90,000 SLRs, or single-lens reflex cameras aimed at
    professional and serious amateur photographers. Prices of its compact
    digital cameras fell 6 percent in the period, the company said.
    Second-Quarter Loss
    Tokyo-based
    Pentax, which makes Optio cameras and medical equipment, today said it
    had a loss in the second quarter on costs to reorganize its business.
    The company plans to eliminate 300 jobs in the next two years to reduce
    costs.
    In the three months ended Sept. 30, Konica Minolta’s net loss
    totaled 10.8 billion yen, compared with a 955 million yen profit a year
    earlier. Bloomberg calculated the quarterly results by subtracting the
    first-quarter numbers from first-half results the company announced
    today.
    Operating profit, or sales minus the cost of goods sold and
    administrative expenses, in the quarter rose to 21.2 billion yen from
    15.6 billion yen. Sales rose 0.2 percent to 273.6 billion yen.
    Net
    loss was 3.48 billion yen in the six months ended Sept. 30, compared
    with an 8.2 billion yen profit a year earlier. The company had forecast
    a 7 billion yen profit. Sales fell to 517.6 billion yen from 535.1
    billion yen.
    The company had a 22.8 billion yen charge in the first half to write down the value of assets.
    In
    the six-month period, sales at the office equipment unit, which
    includes copiers and printers, fell 3.8 percent to 284.7 billion yen.
    Operating profit rose 5 percent to 28.1 billion yen.
    Its optics
    business, which makes lenses used in mobile phones, had a 13.2 percent
    sales increase in the first half. The segment’s operating profit gained
    9.9 percent to 7.9 billion yen.
    Shares of Konica Minolta rose 2.6 percent to 1,010 yen in Tokyo today.