Olympus expects net loss, but core business seen unscathed
By Chris Gallagher and James Topham
TOKYO (Reuters) - Scandal-hit Olympus Corp on Monday forecast a $410 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 $1.7 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 on Monday 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.
"I think it's a possibility," Takayama told reporters, when asked if it was an option to not receive a capital injection and instead move ahead independently by accumulating profit.
Olympus said it now expects a 32 billion yen ($412 million) net loss for the financial year ending March 31, 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. Continued...