Jiji PressTOKYO (Jiji Press) — Japan Display Inc. said Friday that its net loss swelled in the April-June quarter on sluggish demand for liquid crystal display panels for smartphones, with its debts exceeding its assets by ¥77.2 billion as of the end of June.
The maker of small and midsize LCD panels saw its group net loss expand to ¥83.27 billion in the fiscal first quarter from ¥1.77 billion a year before as smartphone sales were weak globally.
Sales dropped 12.5 percent to ¥90.42 billion, leaving an operating loss of ¥27.475 billion, wider than the year-before loss of ¥9.806 billion.
The company booked an impairment loss of ¥51.4 billion for its mainstay plant in Hakusan, Ishikawa Prefecture, after concluding that the factory’s utilization rate is unlikely to recover due to declining orders from its largest customer, Apple Inc.
JDI will receive ¥80 billion in financial aid from Suwa Investment Holdings LLC, a consortium of Chinese and Hong Kong investment funds, by August next year to help its turnaround efforts.
JDI aims to reduce its fixed costs by ¥50 billion a year through structural reform and spin off its smartphone display operations.
The company also said it is considering setting up a joint venture for organic electroluminescent display panels, which are expected to draw stronger demand than LCD panels.
Suwa Investment said in a statement that it is confident that JDI will be able to achieve growth, high profitability and financial independence. But it canceled a plan to join JDI at a press conference on Friday.