|Nikon’s Sendai factory.|
It’s been a rough few years for Nikon, but there is light at the end of the tunnel. Or, so we’re being led to believe based on an interview Nikon’s CFO Muneaki Tokunari gave to Nikkei, wherein he says he expects Nikon to once again reach profitability by the end of its 2022 fiscal year.
In the interview (behind a partial paywall), Tokunari reiterates what Nikon has revealed in its recent financial results—that the company is expecting to post a total loss of more than ¥42B ($387M) by the end of its 2021 fiscal year, which ends on March 31, due to ‘impairment loss on factory equipment in the imaging business, including cameras, and a loss on disposal and valuation of inventory assets, including semiconductor manufacturing equipment in the precision products business.’
By Nikon opting to take all of these losses in its 2021 fiscal year, rather than spread the losses out over multiple years — something usually done to reduce tax liability — Nikon should be able to more quickly return to profitability on paper. Tokunari specifically says three of its four main divisions will post losses this year, but should come out profitable for Nikon’s 2022 fiscal year.
In addition to financial details, Tokunari also revealed Nikon will have 30 Z mount lenses released by March 2022. Considering only 27 lenses are visible on Nikon’s most recent roadmap (11 of which haven’t been fully revealed), that means we can expect three other lenses not currently known of to be released within a year.
|A roadmap of Nikon’s current and future Z mount lenses. Click to enlarge.|
Tokunari also reiterates what both Canon and Nikon have expressed in their respective financial result presentations: it will focus most on professional and hobbyist customers going forward, and seek to reduce operating expenses as much as possible.
As for reducing costs, Tokunari says Nikon has ‘set a target of reducing business operations by ¥63B ($580M),’ with ¥47B ($433M) already reduced this fiscal year. This means we can expect Nikon to reduce operating expenses of its imaging business by another ¥16B ($147M) throughout its 2022 fiscal year.
If this reduction is achieved, Tokunari says Nikon ‘will be in a position to earn stable profits, even if sales are below ¥150B.’ This specific amount is significant because it’s the revenue Nikon expects to pull in from its imaging business for its 2021 fiscal year, which has been marred by economic uncertainty due to the COVID-19 pandemic. This means, if the market is to stabilize as Canon and Sigma executives have alluded to, Nikon may have a path to sustainability, as far as its imaging business is concerned.
Based on previous years, Nikon should release its fourth quarter financial results towards the end of May. Once posted, those numbers should give us more insight as to its current standing and path forward, but we’ll have to wait until mid-2022 to see if Nikon is indeed able to rebound from a rough few years.