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Canon profit hit by slower sales in emerging economies
[TOKYO] Canon said Tuesday its full-year profits shrank by almost a third in last year, blaming a slowdown in emerging markets and the impact of a stronger yen.
The camera and copy machine maker, however, forecast a rebound in net profit for 2017 as it expects an increase in demand for office equipment thanks to strength in the US and some emerging economies.
The Tokyo-based company said in a statement that demand for lower end black-and-white printers declined "due to the continued economic slowdown in emerging countries".
At the same time the camera market contracted, while the firm suffered from a shortage of components caused by supply chain disruptions after April's earthquakes in the southern Kumamoto region.
A pick-up in the yen against the US dollar and euro last year also hurt the bottom line, it said.
A stronger yen is a negative for Japanese exporters because it makes their products less competitive abroad and shrinks repatriated profits.
The Japanese unit has, however, weakened about 10 per cent against the US dollar since November on expectations Donald Trump's big-spending, tax-cutting policies will ramp up US inflation and interest rates.
For the year December 2016, Canon booked a net profit of 150.65 billion yen (S$1.8901 billion), down 31.6 per cent from the year before.
Sales dipped 10.5 per cent to 3.40 trillion yen and operating profit dropped 35.6 per cent to 228.87 billion yen.
For 2017, Canon predicted a 12.8 per cent rise in net profit to 170 billion yen, an 11.4 per cent hike in operating profit to 255 billion yen and a rise of 17.6 per cent in sales to four trillion yen.
Shares in Canon closed down 1.44 per cent at 3,345 yen at the Tokyo Stock Exchange, before the earnings report was released.