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Sharp to log losses over business reforms in Europe
[September 26, 2014]

Sharp to log losses over business reforms in Europe


(Japan Economic Newswire Via Acquire Media NewsEdge) Sharp Corp. said Friday it will post at least 6.4 billion yen ($58 million) in charges during the current business year to reorganize its business operations in Europe.

Sharp also said it has signed agreements with companies in Slovakia and Turkey to form alliances involving its audio visual and household appliance businesses in Europe.

The charges reflect the costs of reducing its workforce and creating a "new value chain" in the region, the struggling Japanese electronics maker said. It will book charges totaling 6.4 billion yen in the second quarter of the business year through next March, and probably additional charges in the third quarter as the terms of the agreements are finalized, it said.



Sharp expects to cut some 300 jobs related to its home appliance sales in Europe.

Despite the charges, Sharp maintained its earnings forecast for the year. It projects a group net profit of 30 billion yen, up from 11.56 billion yen the previous year, as it expects an extraordinary profit due in part to securities sales.


Sharp, which earlier closed its solar cell business in Europe, posted a 1.7 billion yen loss for the first quarter ended in June.

The reorganization is part of Sharp's move to shift its resources to more profitable markets, particularly in Asia.

"We've almost finished our structural reforms in Europe," Sharp Executive Vice President Tetsuo Onishi said at a press conference in Osaka, where the company is headquartered. Onishi also expressed confidence in achieving a significant improvement in the profitability of the company's liquid crystal display television business.

Under one of the new accords, Sharp will license its brand for LCD televisions to Universal Media Corp. Slovakia s.r.o, and may sell its LCD television factory in Poland to Universal Media.

Sharp had been in talks to license its TV brand to Taiwan-based TPV Technology Ltd. But when those negotiations fell through, Sharp turned to Universal Media, sources familiar with the matter said.

In the other alliance, Sharp will transfer control of sales and marketing in Europe of its household appliances to Vestel Ticaret A.S. of Turkey.

Vestel will sell Sharp-brand products such as refrigerators and microwave ovens made at Sharp's factories in Thailand and Shanghai, China. Sharp will also license to Vestel its brand for some products.

Terms of the two agreements will be finalized during the October-December quarter, Sharp said. The agreements were signed following approval by the Sharp board of directors on Friday.

The licensing business for fees is a model Sharp has employed for its TV business in the United States. There a U.S. retailer sells products under the Sharp brand but made by Chinese and Taiwanese manufacturers. Sharp aims to employ a similar model in Europe.

(c) 2014 Kyodo News

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