Nikon says it's expecting 'extraordinary losses,' has updated its FY2020 projections
Nikon Corporation has issued a statement to investors warning the company ‘expects to post extraordinary losses’ for its 2020 fiscal year (FY2020) that ended on March 31, 2020, and has subsequently made a revision to the financial forecast ahead of the upcoming release of the results on May 28.
If Canon’s latest financial results were anything to go by, it was inevitable Nikon’s were going to look even worse. While we don’t have the exact numbers yet, Nikon has preemptively warned investors that it won’t be pretty. In a document titled ‘Notice Regarding Recognition of Extraordinary Losses and Reversal of Deferred Tax Assets in Non-Consolidated Financial Statements,’ Nikon says the following:
‘Using the future plan that reflects the impact and more caused by the spread of COVID-19 to business activities, the Company has assessed an indication that fixed assets may be impaired, performed valuation of financial assets, and examined the recoverability of deferred tax assets.’
Put more simply, Nikon is saying the global impact of the COVID-19 pandemic has caused much of its business to slow or stop production in its facilities and dramatically reduced sales, leading to a drop in value of its production line and equipment. In turn for reducing the value of these departments, Nikon will be able to reduce its taxable income equal to the amount it’s decreased the value of these divisions. Nikon specifically references its Imaging Product Business, saying it is posting a 5.7 billion yen impairment loss.
|A worker pieces together a custom sensor rig for testing in Nikon's Sendai factory.|
In addition to the above notice, Nikon has also published revisions to its projections for the forthcoming FY2020 results. As you might expect, the numbers are down dramatically.
Nikon expects revenue and operating profits to be 591 billion yen and 6 billion yen, respectively, a decrease of 4.7 percent and 70 percent, respectively, compared to Nikon’s previous forecasts. Nikon notes these figures are amplified due to the ‘recognition of impairment losses of 11.1 billion yen’ mentioned above. Nikon specifically notes the 7.5 billion yen in impairment losses for its Imaging Products Business is ‘mainly for property, plant and equipment and intangible assets.’
Summed up, Nikon is expecting much less revenue from its Imaging Products Business and other divisions due to the ongoing COVID-19 pandemic and as a result, it’s devaluing the assets of those divisions to account for the income said divisions won’t be making in an effort to reduce its tax liability. Put even more simply, Nikon is being clever with its accounting to help cushion the financial blow from what is shaping up to be a rough year.
Just how rough remains to be seen, but we'll know for certain on May 28, when the full results are released.
Notice Regarding Recognition of Extraordinary Losses and Reversal of Deferred Tax Assets in Non-Consolidated Financial Statements
NIKON CORPORATION (hereinafter “the Company”) expects to post extraordinary losses and to reverse a part of deferred tax assets in its non-consolidated financial statements, which are prepared in accordance with Japanese GAAP, for the fiscal year ended March 31, 2020.
Using the future plan that reflects the impact and more caused by the spread of COVID-19 to business activities, the Company has assessed an indication that fixed assets may be impaired, performed valuation of financial assets, and examined the recoverability of deferred tax assets.
As a result, the Company has decided to post an impairment loss of 5.7 billion yen for the fixed assets held by Imaging Product Business. And for Nikon Metrology NV, the Company’s consolidated subsidiary, a loss on valuation of the investments in subsidiaries and affiliates and provision for loss on business of subsidiaries and affiliates will be recognized 6.7 billion yen and 9.2 billion yen, respectively. The Company has also decided to reverse a part of deferred tax assets and post deferred tax expenses of 20.6 billion yen. However, the losses associated with the subsidiary mentioned above will have no impact on the consolidated financial results, as those losses will be eliminated in the consolidated financial statements.
Notice Regarding Revision of the Consolidated Financial Forecast for the Fiscal Year Ended March 31, 2020 and Recognition of Impairment Losses
This is to announce that the consolidated financial forecast announced on February 6, 2020 is revised as below, reflecting our recent business performance trend, and to disclose that impairment losses are expected to be recognized.
1. Revision of the Consolidated Financial Forecast
Revised Consolidated Financial Forecast for the Fiscal Year Ended March 31, 2020 (From April 1, 2019 to March 31, 2020)
2. Reason for Revision of the Consolidated Financial Forecast
Decrease in revenue is expected due to factors such as the delay in installations of FPD lithography system, affected by the spread of COVID-19. In addition, operating profit, profit before income taxes and profit attributable to owners of the parent are also expected to be lower than the previous forecast due to the recognition of impairment losses of 11.1 billion yen for non-current assets, as indicated below in “3. The Recognition of Impairment Losses.”
Based on these situations, the consolidated financial forecast announced on February 6, 2020 is revised as above.
3. Recognition of Impairment Losses
For the fiscal year ended March 31, 2020, indication of impairment for non-current assets was examined based on its future utilization and the impact caused by the spread of COVID-19 on business operations. As a result of measuring the recoverable amount of the cash-generating units in which impairment was indicated, a sufficient recoverable amount was not estimated in the Imaging Products Business and the Industrial Metrology Business and Others. Therefore, impairment losses of 11.1 billion yen are to be recognized. In the Imaging Products Business, impairment losses of 7.5 billion yen mainly for property, plant and equipment and intangible assets are to be recognized. In the Industrial Metrology Business and Others, impairment losses of 3.6 billion yen mainly for goodwill, property, plant and equipment and intangible assets are to be recognized.
The new compression standard is set to reduce video file sizes by half to save space and speed-up transmission, paving the way for more portable 8K footage.
Sony recently confirmed plans to launch a successor to the video-centric a7S II. We don't even know the name of the camera, but Jordan already has a feature wish list for the new 'a7S III' – and it doesn't include 8K.
The Profot B10 is the first studio flash system that can be used when shooting with an iPhone camera.
The Pixii camera is an interesting little rangefinder camera that features a 12MP APS-C sensor and lacks a rear LCD display, opting instead to pair with your mobile device, which can be used to view and transfer images.
Sirui is launching an Indiegogo campaign for a wide-angle answer to its existing 50mm F1.8 anamorphic lens. The 35mm APS-C lens will come in a Micro Four Thirds mount with adapters for other systems.
Sony has added a 12-24mm F2.8 to its top-shelf 'G Master' series of lenses. It's the widest constant F2.8 zoom currently offered for full-frame, with a hefty price tag to match: it will sell for $3000 when it ships in mid-August.
Take a look at the view from Sony's new ultra-wide F2.8 zoom – we paired it with the a7R IV for some initial shooting.
Canon's EOS-1D X Mark III is one of the best DSLRs ever made. With fast burst speeds, great video quality and impressive autofocus, the 1D X III is equal parts cinema rig and sports shooter. Find out how it fares against steep competition in our full review.
Nikon Rumors is reporting that Nikon will announce successors to its Z6 and Z7 camera systems by the end of the calendar year.
Canon says the event, set to take place at 14:00 CEST in two days on July 9, will be its 'biggest product launch yet.'
The Verge Video Director, Becca Farsace, shows how she built a custom Raspberry Pi camera with effectively zero coding knowledge over the course of just three days.
The EOS R5 has been in the works for some time, and Canon has published a handful of specifications, but there's still plenty we don't know. What are you hoping to see from Canon's forthcoming flagship camera?
Canon's CE-SAT-IB satellite camera was destroyed alongside six other satellites during Rocket Lab's ironically-named 'Pics or It Didn't Happen Mission.'
This sample gallery includes images from our recent review of the Tamron 28-200mm F2.8-5.6 Di III RXD zoom lens. Check out these photos to see how it performs, from wide-angle to telephoto and everything in between.
The Tamron 28-200mm F2.8-5.6 Di III RXD provides a wide zoom range in compact, weather-sealed design. Find out why it's Chris and Jordan's new favorite travel lens.
Kodak Portra 800 is a wonderful and versatile color film. And any rumors of it being discontinued, we're pleased to report, are simply untrue. That's a good thing, because it's capable of producing lovely results in all sorts of conditions.
Boering has left the World Press Photo without much of an explanation from either him or the organization, but he tells DPReview the COVID-19 pandemic is forcing the WPP to change the way it makes money.
The standard-size deck of playing cards features unique photography-oriented artwork and act as cheat sheets for photographers.
The Sony ZV-1 and Panasonic Lumix DC-G100 are the first cameras we've seen that are overtly designed with vlogging in mind – and the changes they represent could have implications for the future of all cameras.
The utility allows the E-M1X, E-M1, E-M1 Mark II, E-M1 Mark III and E-M5 Mark II cameras to be used with video conferencing apps over USB.
Olympus is showing final images of its under-development 150-400mm F4.5, which it says will arrive this winter. An unspecified macro and 8-25mm F4 Pro have also been added to the lens roadmap, and the E-M1X's AF gains bird detection.
The scam, which involves sending fake copyright violation notices, has been circulating on the social media platform since at least June 9.
Fujifilm is one of just two producers of tape media (the other being Sony) and it is hard at work on a breakthrough that will allow single tape storage drives to offer 400TB capacities in the coming years.
The National Parks Service says it's investigating the incident, which took place just two days after the park opened following a shutdown due to the COVID-19 pandemic.
Professional full frame lenses are usually large and have fast apertures. In this episode of DPReview TV, Chris and Jordan argue that there's a need for slow professional lenses – inspired by some of their favorite Micro Four Thirds lenses.
The camera maker joins Olympus, Fujifilm and others is a legal tussle over US digital camera technology patents held by DigiMedia Tech.
NASA's Solar Dynamics Observatory (SDO) photographs the sun every 0.75 seconds. In its first decade in space, the SDO has captured more than 425 million images of the sun. NASA has compiled these images into an amazing time lapse, come check it out.
The lens is available for Leica M, Sony FE, Nikon Z and L-mount camera systems, and now holds the title as the world's widest rectilinear lens for full-frame camera systems.
Tamron's new 28-200mm F2.8-5.6 is a versatile zoom lens for Sony E-mount. Well-suited for travel photography, it's compact, lightweight, and fast/quiet to focus.
Fujifilm has announced that its GF 30mm F3.5 R WR wide-angle lens for its medium format cameras will ship in late July or early August.