Panasonic New Zealand returns to profit as sales decline

Panasonic New Zealand returned to profitability in the year ended 31 March 2026, despite a sharp decline in revenue, with lower costs, higher support income from related companies and reduced bad debt charges helping the business recover from the previous year's loss.

The company reported a net profit after tax of NZD $84,000, compared with a NZD $4.28 million loss a year earlier. Profit before income tax reached NZD $164,000, reversing a NZD $5.90 million pre-tax loss in the previous financial year.

Revenue falls

Revenue from contracts with customers declined during the year as demand weakened across the business.

Sales revenue totalled approximately NZD $90.8 million, down from NZD $116.8 million in the previous financial year. The reduction was reflected in lower inventory consumption, with the cost of inventories recognised as an expense falling to NZD $82.4 million from NZD $105.5 million.

Inventory holdings also reduced significantly. Finished goods inventories fell to NZD $12.7 million from NZD $22.4 million, while total inventories declined to NZD $19.6 million from NZD $28.8 million.

Support income

Other income increased substantially during the year, rising to NZD $7.8 million from NZD $1.3 million.

The increase was largely driven by NZD $6.1 million in support income received, compared with no equivalent amount in the previous year. Income from support services also increased to NZD $1.4 million from NZD $1.1 million.

Related party disclosures show the company received NZD $10.8 million in support from fellow subsidiaries during the year. The support covered activities including sales promotion, marketing, restructuring and warranty programmes.

Credit quality

Credit losses improved materially compared with the prior year.

Losses relating to trade receivables declined to NZD $111,000, compared with NZD $567,000 in FY2025. The company's allowance for doubtful debts reduced to NZD $296,000 from NZD $871,000 after NZD $686,000 of receivables were written off during the year.

Trade receivables also decreased to NZD $10.0 million from NZD $11.8 million, reflecting lower sales volumes.

Balance sheet

Cash and cash equivalents stood at NZD $2.6 million at year end, down from NZD $3.6 million a year earlier.

Lease liabilities continued to fall, decreasing to NZD $7.8 million from NZD $9.7 million. Right-of-use assets also reduced to NZD $5.3 million from NZD $6.9 million as leases matured. Total lease-related cash outflows during the year were NZD $2.5 million.

Trade and other payables increased to NZD $8.3 million from NZD $6.9 million, while accrued expenses rose during the year.

The company also reduced its reliance on short-term related-party borrowing. Outstanding related party loans fell to NZD $1.0 million at year end from NZD $9.0 million a year earlier.

Provisions rise

Total provisions increased to NZD $7.9 million from NZD $5.4 million.

Warranty provisions rose to NZD $3.9 million, while product support provisions increased to NZD $2.9 million. Management said these provisions are based on historical claims data and recent trends that may affect future claims.

Parent support

Panasonic New Zealand remains a wholly owned subsidiary of Panasonic Asia Pacific in Singapore, with Panasonic Holdings in Japan serving as the ultimate parent company.

Transactions with fellow subsidiaries remained significant during the year. The company purchased NZD $64.6 million of goods and services from related entities and recorded NZD $8.4 million in related-party receivables at year-end.

Retained earnings increased to NZD $9.0 million from NZD $8.9 million, reflecting the return to profitability. No dividend was paid during the financial year.