Mounting losses expected to top ¥765 billion (US$9.6 billion) and a dash to cut costs across all operations has led to Panasonic halting further capital expenditure and expansion plans indefinitely at its new PV module plant in Malaysia.
Releasing its Q2 2013 financial results, Panasonic confirmed that it expected a significant fall in demand for its HIT modules in the second half of the year, primarily due to weakening demand across Europe.
Sales within its Energy segment, which includes its solar business operations, declined 5% to ¥292.5 billion in Q2, down from ¥307.7 billion in the same period a year ago.
However, segment profitability improved to ¥2.8 billion compared with a loss of ¥9.8 billion in the same period a year ago. The company cited lower fixed and material costs for the improvement. Panasonic said it expected the Energy segment to return to an undisclosed loss in the second half of the financial year.
The company also said it would make asset impairments as part of its cost reduction programme that included a full write-down on the value of its recent investments in PV production expansions (¥148 billion), primarily in Malaysia.
Emphasis on restructuring its solar operations were said to be focused on the Japanese residential market, while integrating R&D, production and sales operations within its Eco Solutions segment. Panasonic includes lighting and environmental systems within its Eco Solutions segment.
Major Japanese electronics firms, including Panasonic have been struggling against global competition and declining sales and profitability issues for many years. With respect to Panasonic the company reported a record loss of ¥772 billion in FY2012. However, the company is on course to have notched up losses of ¥2 trillion over the last five years.