Panasonic New Zealand reports heavy loss amidst decline in revenue and rising costs

Panasonic New Zealand has posted a significant financial downturn for the year ending 31 March 2025, with a comprehensive loss of $4.56 million, sharply reversing its profit of $3.33 million in the previous financial year. The financial results, independently audited by PwC, reflect a challenging operating environment marked by declining sales, narrowing margins, and persistent cost pressures.

Revenue downturn and cost challenges

The company's revenue from contracts with customers fell markedly from $176.4 million in 2024 to $132.99 million in 2025 - a decrease of approximately 25%. The revenue drop, one of the most striking year-on-year changes in the report, signals weakening demand across Panasonic's product lines in the region.

Despite efforts to contain certain expenses, the cost of sales remained high. The cost of finished goods sold was $105.46 million, only marginally down from $139.91 million in 2024. Gross margins narrowed considerably as a result, exerting pressure on the bottom line. Additional operating expenses also weighed on performance, including employee benefits ($16.29 million), marketing ($2.63 million), and distribution costs ($2.74 million).

Depreciation and amortisation expenses amounted to $2.4 million, and finance costs on lease liabilities reached $481,000 - both further eroding profit margins.

Net loss and tax Benefits

Panasonic New Zealand recorded a pre-tax loss of $6.19 million. After accounting for a deferred tax benefit of $1.62 million, the net loss for the year stood at $4.57 million. This result compares unfavourably with the prior year's net profit of $1.67 million.

Other comprehensive losses, including cash flow hedge adjustments, added a further $271,000 to the decline in equity, culminating in a total comprehensive loss of $4.56 million.

Balance sheet contraction

The company's total assets declined from $61.4 million to $56.65 million. Current assets saw a reduction across nearly every line item, notably cash and cash equivalents, which fell to $3.63 million from $5.8 million in 2024. Trade receivables and inventories were also down, reflecting reduced operational activity and tightened working capital.

Equity suffered a substantial decline, dropping from $24.08 million to $18.93 million over the year. This decline was driven by accumulated losses and dividend payments, including a $600,000 dividend distributed during the financial year.

Cash flow pressure

Operating cash flows were significantly affected, generating only $1.1 million compared to $5.6 million the year prior. Lower customer receipts and sustained outflows for suppliers and employees reduced cash generation. Meanwhile, the company recorded $2.45 million in lease payments and a $600,000 dividend outflow, contributing to a net decrease in cash of $2.25 million.

Outlook and commitments

Panasonic New Zealand reported no significant capital commitments as of 31 March 2025, and the directors noted no contingent liabilities. The company also confirmed no significant post-balance-sheet events impacting the accounts.

The directors have prepared the accounts on a going concern basis and have reaffirmed that the financial statements comply with NZ GAAP and the NZ IFRS Reduced Disclosure Regime. The audit report, issued without qualification, confirmed that the financials presented a fair view of the company's position.

Conclusion

Panasonic New Zealand faces a challenging outlook following a year of steep financial decline. A significant drop in sales and continued high input costs have placed pressure on profitability and liquidity. The company's response to these financial headwinds in the coming financial year will be pivotal in determining its ability to recover lost ground.