Weak sales knock Sanyo forecast

Sanyo is battling competition from cheaper rivals in China and Taiwan

Struggling Japanese electronics firm Sanyo has forecast another annual loss, blaming weak sales of digital cameras and mobile phones.

Sanyo now expects to post a 50bn yen ($430m; £224.3m) net loss in 2006/07, its third consecutive annual loss.

Earlier this year it had predicted a yearly profit of 20bn yen.

The news came as the group revealed its net losses for the six months to September had narrowed to 3.6bn yen compared with a 142.5bn yen last year.

"For the electronics industry, due to sharp rises in the prices of crude oil and raw materials and price competition, prices are continuing to fall and the relentless effects on the business environment have continued," the company said in a statement.

Tough times

The lower forecast is the latest setback for the firm which is struggling against high costs and strong price competition from cheaper Chinese and Taiwanese manufacturers.

In June, it scrapped plans for a joint venture to make mobile phone handsets with Finland's Nokia.

Sanyo embarked on a three-year restructuring drive last year in an effort to reduce its losses and refocus its operations.

The shake-up has resulted in a management overhaul and 14,000 job cuts.

As it released its results, Sanyo also unveiled plans to axe a further 2,200 jobs - 1,500 will go in Japan - at a cost of 40bn yen.