Tokyo, Feb 4 (Reuters) - Panasonic Holdings of Japan has raised the annual earnings forecast for its energy unit, a supplier of batteries to Tesla. This increase is due to stronger sales of energy storage systems and improved profitability at its U.S. battery plant.
The company also aims to enhance group profitability by over 300 billion yen ($1.93 billion) and achieve a return on equity of more than 10% by the fiscal year ending March 2029, as stated in an announcement made on Tuesday.
Panasonic has upped the full-year outlook for the battery segment by 14% to 124 billion yen ($798.35 million) following a 39% year-on-year increase in operating profit for the unit in the third quarter.
The segment's improved performance is attributed to increased sales of energy storage systems, lower material costs, and better profitability in its North American in-vehicle business.
These factors helped offset the decline in automotive battery sales that resulted in reduced production in Japan and heightened costs for two facilities: a new U.S. battery plant and one in Japan's Wakayama prefecture.
In a separate statement, Panasonic announced its focus on management reform in the fiscal year beginning April, with the goal of boosting group profitability by more than 150 billion yen by fiscal 2026 and an additional 150 billion yen by fiscal 2028.
Panasonic Energy runs a plant in the U.S. state of Nevada supplying batteries to Tesla and plans to open a second U.S. plant in Kansas this year to expand its presence in North America.
According to Panasonic's financial documents, third-quarter operating income for the key segment climbed to 42 billion yen ($270.46 million). The company also maintained its full-year profit projection for the entire group business at 380 billion yen.
Panasonic faces competition from other Asian battery manufacturers such as China's CATL and South Korea's LG Energy Solution. The latter announced last month its intention to cut capital expenditure by up to 30% this year due to slowing EV demand growth.
($1 = 155.1800 yen)