Lockdowns in Shanghai to Take 3 Months to ‘Normalize’: Sony CFO
Sony shipped 1.6 million TVs in its fiscal Q4 ended March 31, finishing the year with 8.5 million sets sold, reported the company Tuesday. Year-over-year unit shipments were down 20% for the quarter and 9% for the year, yet revenue for the year in the core consumer tech segment, Electronics Products and Services, increased 13% to 271.1 billion yen ($2.08 billion), “due to an improvement in the product mix,” said Sony.
Sony endured “various supply constraints” during the year, including the “continued disruption of manufacturing and logistics resulting from the COVID-19 pandemic, and a shortage of components, primarily semiconductors,” said Chief Financial Officer Hiroki Totoki on a Tuesday call with media and analysts. “We were able to overcome these issues primarily through close management of our supply chain.”
Revenue in the segment in Sony’s fiscal 2022 is expected to increase 3% year over year, despite a projected unit-sales decline in TVs, said Totoki. “Due to the continued spread of infection, there is a possibility that the operations at factories in Shanghai and the surrounding region, as well as procurement of parts from the region, will be constrained,” said the CFO. “We currently expect it will take approximately three months for the situation to normalize.”
The slowdown in the global economy due to “rapid inflation” is expected to make the “demand environment” in this fiscal year “even more severe than in recent years,” said Totoki. Sony’s “business scale” in Ukraine and Russia was about 0.7% of its consolidated sales in the year just ended, he said. “Although these regions have minimal impact on our financial performance, we are monitoring the impact of the situation on the global economy going forward.”
Sony changed the name of its consumer tech segment to Entertainment, Technology and Services, effective with the April 1 start of the new fiscal year, said Totoki. “We will work with creators to create the entertainment of the future by providing technology that enables new visual and audio experiences while also providing new services such as virtual production and sports entertainment,” he said. Sony will further explain the rationale for the name change in a briefing planned for May 27, he said.
Sony sold 11.5 million PlayStation 5 consoles for the year and expects to sell 18 million more this year, said Totoki. That’s at least 20% fewer PS5s than in previous Sony forecasts of 22.6 million, he said: “What we can say safely is that we can achieve the necessary components for 18 million units, and so that is the reason for this change in the number.” Sony’s PS5 inventories “still remain very low,” said Totoki. In Sony’s goal to supply customers with PS5s “smoothly on a timely basis,” said the CFO, “in that sense we are still behind or short.”