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Sony nearly doubles H1 net profit, upgrades its annual forecast

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Sony says April-September net profit reached 399.4 billion yen, up 88.7 per cent from a year ago. Operating profit and sales were both up, with video games driving the good news.

Tokyo

SONY announced on Tuesday that its six-month net profit had nearly doubled from last year to a record high, and upgraded its annual forecasts, with games and movies leading the way.

The electronics and entertainment giant said April-September net profit reached 399.4 billion yen (S$4.9 billion), up 88.7 per cent from a year ago and marking its best performance for the period. Operating profit and sales were both up, with video games driving the good news, including blockbuster software titles like God of War and Spider-Man.

Sony's quality sensors for smartphone cameras saw explosive demand, becoming a major pillar of the firm's revenue. The movies and music segments also contributed to growing profits, though Sony's mobile phone business continued to struggle.

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The robust six-month performance, with operating profit up 20.1 per cent at 434.5 billion yen and sales rising 5.5 per cent to 4.1 trillion yen, prompted Sony to upgrade outlook for the second half. It now projects an annual net profit of 705 billion yen, which would mark a new all-time high, along with annual operating profit of 870 billion yen and sales of 8.7 trillion yen.

"Various areas including music as well as the game and network services field" are doing better than earlier thought, the firm said.

Among movies, television licensing revenues from Jumanji: Welcome to the Jungle and Peter Rabbit added to its sales. Foreign exchange rates and strong sales of Sony's paid membership game service also contributed to the optimistic annual expectations, the company said.

However, for the mobile phone segment, Sony braced for further struggles particularly with smartphone sales falling in Europe and Japan. Sony expected to see a loss from the segment despite attempts to cut costs. The firm has struggled to win market share against giants Samsung and Apple, and faces pressure from Chinese manufacturers as well.

Analysts said the company results showed it was entering a growth phase after a remarkable recovery that followed several painful years of huge losses.

"Its game sector has continued spearheading its recovery. Strong titles offset slowing sales of PlayStation 4 consoles," Hideki Yasuda, an analyst at Ace Research Institute in Tokyo, told AFP ahead of the company's announcement. "Other than mobile businesses, I have not seen any major risks surrounding Sony."

Yasuo Imanaka, an analyst at Rakuten Securities in Tokyo, added: "Sony has already completed a full-fledged comeback and is now heading toward a new growth phase. The only concern is its mobile phone business. Sony is required to revamp the sector drastically." AFP