by Staff Writers
Tokyo (AFP) Oct 29, 2012
Renesas Electronics on Monday posted a $1.18 billion loss in its fiscal second quarter owing to huge restructuring costs at the troubled Japanese microchip maker.
The company, a major supplier of microcontrollers used in automobiles, said it lost 94.3 billion yen ($1.18 billion) in the three months to September, compared with an 8.8 billion yen loss in the same quarter a year ago.
Revenue was down 8.5 percent at 222.8 billion yen, it said.
Renesas kept unchanged its previous forecast for a 150 billion yen net loss, an operating profit of 21 billion yen, and sales of 868 billion yen in the full year to March.
The company booked a special loss of 86.9 billion yen on costs tied to staff cuts and other restructuring costs.
Japan's microchip sector has struggled with a strong yen and fierce competition, especially from South Korean and Taiwanese rivals, with Renesas in desperate need of a cash injection.
Firms were also hit hard by last year's quake-tsunami disaster.
On Monday, Renesas said it lost 115.1 billion yen in the six months to September, expanding a year-earlier loss of 42.0 billion yen, as sales fell 9.1 percent on-year to 409.4 billion yen.
"In addition to a decline in demand in Europe and China, a stronger yen against the euro in particular hurt sales," it said in a statement.
A strong yen makes Japanese firms' products pricier overseas while shrinking the value of their repatriated foreign income.
Renesas's hard-hit shares soared earlier this month after a report that Japan's state-backed turnaround fund and a group of leading domestic firms planned to invest about $2.55 billion in the struggling firm.
About 10 major Japanese corporate names -- including Toyota, Nissan, Honda, Panasonic, Canon and Nikon -- were expected to pitch in, according to the leading Nikkei business daily.
In July, Renesas announced it would cut thousands of jobs and reorganise domestic production to concentrate on its mainstay businesses.
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