Scandal-hit Olympus has forecast a €311 million full-year loss due largely to its ailing camera operations, but strength in its endoscope business suggested its core division would emerge from the debacle unscathed and its president said it might try to go it alone without seeking outside capital.
The Japanese maker of cameras and medical equipment has been considering alliance offers to shore up its finances after a €1.3 billion accounting scandal severely depleted its assets, with Sony, Fujifilm, Terumo and South Korea's Samsung Electronics believed to be among possible suitors.
"Given the nature of the (endoscope) business, there are limited competitors and the scandal hasn't had a huge impact on the business," said Yasuo Sakuma, a portfolio manager at Bayview Asset.
"The question is how aggressive potential bidders will be. Sony may be the most aggressive as new CEO (Kazuo) Hirai has said explicitly that medical services will be a new focus. Fujifilm may be a bit reluctant as they could have anti-trust problems."
Olympus president Shuichi Takayama reiterated today that any decision on tie-ups must wait until the installation of new management after its annual shareholders' meeting in April , and added that pressing on without boosting capital was also an option.
Olympus said it now expects a 32 billion yen (€311 billion) net loss for the financial year ending March 31st, hit in large part by impairment losses in its ailing camera business and tax asset writedowns.
That compared with a 3.87 billion yen net profit in the prior year, and its previous forecast for an 18 billion yen profit that it withdrew in the wake of the scandal.
For its October-December third quarter, Olympus, which holds a 70 per cent share of the global market for diagnostic endoscopes, reported a 756 million yen net loss, compared with a 2.04 billion yen net profit in the same period a year earlier.
In a sign that its core endoscope business may survive the scandal untarnished, operating profit in its medical systems business rose 7 per cent year-on-year to 18.87 billion yen during the quarter, having recovered from disaster-related supply disruptions earlier in the year.
By contrast, its imaging systems division, which includes its camera business, booked a quarterly operating loss of 3.56 billion yen.
Overall group operating profit dipped 13 per cent to 8.42 billion yen in October-December.
In December, Olympus filed five years' worth of corrected earnings statements to iron out its accounts and said that as of the end of September net assets had dwindled to 46 billion yen, from a restated 225 billion yen in March 2007.
The accounting scandal erupted when Olympus fired its British chief executive Michael Woodford on October 14th, after he raised concerns about dubious book-keeping.
Since then, Olympus has admitted it used improper accounting to conceal massive investment losses under a scheme that began in the 1990s. It remains under investigation by law enforcement agencies in Japan, Britain and the United States.
Reuters
