Playstation, Weak Yen Help Sony Double Pre-Tax Profits

Strong sales of the PlayStation video games system and a favourable exchange rate helped Sony, the Japanese electronics and entertainment group, to more than double pre-tax profits last year.

Sony, which also benefited from the release of best-selling albums by The Fugees and Celine Dion, saw consolidated pre-tax profits soar from Y138.2 billion to Y312.4 billion ($2.5 billion), in the year to March 31, on sales up 23 per cent to a record Y5,663 billion. Group net profits also more than doubled, from Y54.3 billion to Y139.5 billion, exceeding Sonys original forecast of Y132 billion.

The Japanese group predicts continued growth in sales and profits for this year, buoyed by growing demand for digital products including its new digital video disc systems.

 

Sonys strong performance last year owed much to the favourable exchange rate, which increased income from the foreign markets that provide nearly 70 per cent of group sales. Without depreciation of the yen against the main currencies, sales would have been about Y520 billion lower, and operating profits would have fallen 6.9 per cent, rather than rising 57 per cent rise to Y370.3 billion.

However, Sony also benefited from a strong performance across its consumer electronics interests. Video equipment sales rose 11 per cent, and camcorder sales 14 per cent.

Audio equipment also fared well, with sales up 14 per cent on brisk sales of car audio and minidisc players. The television division profited from demand for computer monitors and increased sales 30 per cent. The star performer, however, was the PlayStation, which staved off competition from the rival Sega Saturn console and the newly-launched Nintendo 64 system, to muster cumulative global sales of 13.5 million hardware units and 98m software titles.

The entertainment business, which contributes about a quarter of overall sales, benefited mainly from buoyant demand for Sonys products