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Sony to book impairment loss of 1 bln USD in movie business

Editor: Wang Lingxiao 丨Xinhua

01-31-2017 11:19 BJT

TOKYO, Jan. 30 (Xinhua) -- Sony Corp. said on Monday that it will book a 112.1 billion yen (977 million U.S. dollars) write-down loss in its movie business amid studio struggles and slumping demand for DVDs and Blu-ray disks.

The company said it has projected a 270-billion-yen group operating profit and a 60-billion-yen net profit for fiscal 2016 ending in March, with it booking the charge in the fiscal third quarter.

Sony said it was examining how its current profits outlooks will affect the impairment losses, but will sell shares to the tune of 37 billion yen in its M3 Inc. medical web service, to Goldman Sachs Group Inc.'s Japan unit, to help offset the losses.

The electronics giant said it will confirm the impairment loss along with its earnings for the April-December period on Thursday.

The Tokyo-based company also said the losses were mainly attributable to its Sony Pictures Entertainment Inc., with the write-down coming on falling valuations of its assets in the movie-making business.

The news comes just two weeks after Sony said its chief executive officer of Sony Entertainment, Michael Lynton, will be leaving after holding the position for 13 years.

The studio has struggled in the wake of two major cinematic flops, including the Ghostbusters sequel last year and a movie based on the Angry Birds video game.

There has been a suspicion in the market that Sony doesn't have a firm grip on the movie business, but still the amount is a surprise. That said, with Lynton's departure and this writedown, all the bad news is out and the attention can turn on their plan for the coming fiscal year, Kazunori Ito, an analyst at Morningstar Investment Services, was quoted as saying.

With the firm being propped up by its video game business, including the popular PlayStation 4 games console, Sony said the DVD and Blu-ray market had taken its toll.

"The decline in the DVD and Blue-ray market was faster than we anticipated," Takashi Iida, a Sony spokesman, was quoted as saying.

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