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Pioneer Reports Higher Net Sales, But Fiscal Year Loss

Tokyo — Pioneer Electronics reported higher net sales but lower operating profits and a net loss for its fiscal year, ended March 31.

Consolidated net sales grew 3.5 percent year on year, to 451,841 million yen, due to increased OEM sales of car navigation systems and consumer-market sales of car audio products.

Operating income declined 52.1 percent year on year, to 5,997 million yen, due to an increase in selling, general and administrative (SG&A) expenses and a lower gross profit margin, among other factors.

Pioneer recorded a net loss of 19,552 million yen compared with the previous fiscal year’s 3,670 million yen net income, reflecting the decline in operating income and combined with 6,242 million yen in restructuring costs and a 5,040 million loss on impairment of investment securities recorded as an extraordinary loss.

In car electronics sales grew 15.4 percent year on year, to 312,568 million. Sales of car navigation systems rose on increased OEM sales in Japan and North America, and despite a decline in consumer-market sales, primarily in Japan, reflecting weak market conditions. Sales of car audio products increased, with higher consumer-market sales in each overseas region and growth in OEM sales mainly in North America.

The segment’s operating income declined 4.9 percent to 9,786 million yen, reflecting a lower gross profit margin and an increase in SG&A expenses, and despite an increase in sales.

Home electronics sales declined 22.0 percent year on year, to 95,925 million yen. Although sales of DJ equipment rose, sales of optical-disc-drive-related products declined substantially, primarily for A/V use.

The segment recorded an operating loss of 2,798 million, compared with operating income of 3,560 million yen in fiscal 2012, mainly because of lower sales and an increase in SG&A expenses, the company said.

Pioneer also announced a two-year plan for its business segments. In car electronics it will “work to create new value through transforming the business model.” Part of that will be technology that “transcends conventional car navigation systems,” in a partnership with Mitsubishi Electric to jointly develop a “multimedia platform” for vehicle-linked next-generation automotive equipment.

At the same time, Pioneer is partnering with NTT Docomo in the “Docomo Drive Net” smartphone-based navigation service, to strengthen Pioneer’s Cloud-based information service base for enhanced “comfort” and “entertainment.”

In home electronics Pioneer hopes to leverage its DJ equipment business “to achieve steady growth,” and plans to spin off its home A/V business and integrate it into a home electronics sales subsidiary in July, and also merging its telephone business subsidiary into this same sales subsidiary in October.

Pioneer will also further streamline its optical disc business with a target of July for reducing the size of the business structure, including headcount, by roughly 40 percent, compared with fiscal 2013.