Agence France-Presse . Tokyo

Japan’s Hitachi Ltd said Friday it expected to spend a second straight year in the red, incurring a net loss of 700 million dollars as its flat-screen television business slumped.

Hitachi revised its forecast of a 10 billion yen profit for the year ending March 31, saying it now expected a group net loss of 70 billion yen (700 million dollars).

The company said it expected operating losses of 112 billion yen at the digital media and home-use devices division due to ‘prolonged drops in market prices of flat televisions and lower-than-expected sales of large-screen models.’

It will book a total of 56 billion yen in restructuring charges from its loss-making plasma panel and plasma TV business, a statement said.

Hitachi said it would also write down a deferred tax asset of some 62 billion yen after reassessing the profitability of its digital media and consumer electronics division, which covers the flat TV business.

‘Because a massive appreciation of the yen and falling share prices may severely affect consumer sentiment ... we feel it is wise to take the necessary accounting measures at this point to lighten the financial burden on our balance sheet,’ chief financial officer Toyoaki Nakamura told a press conference.

The dollar slumped below the key 100 yen level Thursday for the first time in 12 years, threatening to cut into Japanese export earnings.

Competition is also fierce among Japanese consumer electronics manufacturers, and plasma television sales have been falling behind those for liquid crystal displays, a rival high-definition technology.

‘While we continue to face steep price declines of our flat TVs, we now want to improve the profitability (of the business) by boosting our sales outside the Hitachi group, including sales to Chinese assembly makers,’ Nakamura said. Pioneer Corp said last week that it was giving up on producing plasma panels.

The move left Hitachi and industry leader Matsushita, the maker of the Panasonic brand, as the only Japanese firms left in the business. Hitachi had blamed last year’s loss largely on the one-off factor of repairing faulty turbines it had supplied to two nuclear plants and projected a return to the black this year.

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