Aiwa suffers poor half-year earnings, president to resign.

TOKYO, Oct. 25 Kyodo

Audio-visual equipment maker Aiwa Co. on Wednesday announced poor consolidated earnings in the first half of fiscal 2000 ended in September, forcing the company to decide to replace President Yoshio Ishigaki next week.

Ishigaki will be demoted to a director Tuesday over his responsibility in the company's expected failure to reach its goal of posting profits in the full year through March 2001.

Aiwa also decided at a board directors' meeting that Chairman Kozo Osone will concurrently serve as acting president from Nov. 1.

In the first fiscal half, Aiwa suffered a consolidated net loss of 10,652 million yen, deteriorating from a profit of 276 million yen a year earlier.

Aiwa attributed the negative result to new accounting standards stipulating that companies write off shortfalls in their retirement allowances and appraisal losses on securities holdings as extraordinary losses.

Moreover, Aiwa's consolidated sales dropped 14% to 134.95 billion yen, reflecting a sharp fall in sales prices amid intense competition and production delays caused by parts shortages.

Sales of visual equipment, such as televisions and satellite tuners for Sky PerfecTV, fared well, but those of audio and other information devices posted falls on the year.

The company posted a consolidated pretax loss of 6,855 million yen, a sharp turnaround from a profit of 753 million yen posted the previous year, due partly to increased interest payments.

For the second half of the year, Aiwa expects to continue facing serious business conditions, such as uncertainty over the U.S. economy, the bearish Japanese economy and sliding profits in Europe caused by the weak euro.

Aiwa is projected to post a consolidated net loss of 21 billion yen for the full year to March 31, 2001, a further deterioration from a loss of 9.54 billion yen recorded the preceding year. Its group sales are expected to fall 5.4% to 310 billion yen and its consolidated pretax loss will likely expand to 16.4 billion yen from 9.08 billion yen.

On an unconsolidated basis, Aiwa posted a net loss of 7.44 billion yen in the half-year ended in September, compared with a profit of 226 million yen a year before.

The company's unconsolidated sales declined 7.7% to 134.76 billion yen and its unconsolidated pretax loss came to 3.72 billion yen, compared with a profit of 456 million yen.