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Sony returns to profit for first time in five years

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Sony has posted its first full-year net profit for the past five years, bolstered by the Japanese company’s asset sales and weakened yen.

Net profit for the year 2012 ending March 31 was 43 billion yen (£280 million) marking the first return to profit in five continuous years. The 457 billion yen (£2.97 billion) loss for the previous year was the worst in Sony’s 66-year existence.

Due to restructuring efforts, the Japanese electronics company predicts its earnings to rise by a further 16 per cent by the end of the 2013 fiscal year.

The company has already axed 10,000 jobs, reduced its television manufacturing business and sold key assets including its New York-based US headquarters valued at $1 billion (£643 million).

Sony had suffered from huge financial losses in recent years, despite once being a market leader in several product categories. Faced by increasing competition from rival television manufacturers, Sony’s television arm has been losing money for nearly a decade.

This year, Sony has reduced television losses significantly and believes it will achieve profitability in this financial year. Losses in the consumer electronics division for 2012 were 84 billion yen (£547 million), reduced by 60 per cent from previous year figures.

Game operating income for Sony decreased from 27.6 billion yen (£179 million) to 1.7 billion year-on-year (£11.1 million), affected largely by a decrease in sales of PSP hardware and software. The PS Vita’s recent Japanese price reduction and a slow in sales were also contributing factors.

According to Sony’s results, despite an increase in PlayStation 3 hardware and software sales, its gaming sales were “essentially flat. Combined sales of PlayStation 3 and PlayStation 2 for the fiscal year ending March 31 2013 amounted to 16.5 million units, but PSP and PS Vita sales only totalled 7 million altogether.

Although no public sales forecasts have been announced for the PS4, Sony believes its next-generation console will boost its gaming sales significantly before the end of the next fiscal year ending March 31 2014.

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