Japan Display posts wider Q1 loss as Apple orders wane

Paterniano Del Favero
Agosto 9, 2017

Wednesday's jobs announcement came as the firm logged a net loss of 31.5 billion yen in the April-June period, almost three times higher than its shortfall in the same quarter a year earlier.

Some of the new iPhone models due out this fall are expected to feature OLED panels, and Chinese smartphone makers are likely to follow Apple's lead.

Japan Display's continuing struggle questions the validity of a government intervention five years ago, when INCJ helped form the firm by combining the ailing display units of Sony Corp, Hitachi Ltd and Toshiba Corp.

"We will become a leading manufacturer of OLED displays", CEO Higashiiriki said in a press conference. That is on top of 75 billion yen in aid past year from INCJ.

But there are doubts if INCJ would allow Chinese players to have a stake in the firm, said Masayuki Otani, chief market analyst at Securities Japan.

The job cuts, which represent almost 30 per cent of the 13,100-strong workforce, are expected to save 50 billion yen ($455 million) annually, it said, adding that total restructuring costs would be about 170 billion yen.

The liquid crystal display (LCD) maker is exploring capital tie-ups with strategic investors and buyout funds, the report said, without citing sources.

The company also aims to reduce its reliance on smartphone parts production, a volatile business that accounted for 81% of its sales in fiscal 2016. The company did not catch on to the growing trend of OLED displays and is staring at losses in the coming quarters.

Japan Display Inc posted a wider-than-expected loss and said it would slash 30 percent of its workforce, as it struggles with slow iPhones-related demand from Apple Inc and its late entry into organic light-emitting diode (OLED) screens.

Japan Display is now looking for a capital injection from an outside partner to fund its massive investment needs. 3,500 Japan Display employees could end up out of a job following this restructuring.

Japan Display said it had received a new line of credit worth 107 billion yen from its main lenders to finance the operational overhaul. It unloaded about half of its holdings in the company's initial public offering in March 2014.

Its share price closed 1.5% lower at 195 yen on Thursday, or about a fifth of the IPO price of 900 yen.

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