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Sony hikes net profit forecasts as weak yen boosts gaming

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Sony hikes net profit forecasts as weak yen boosts gaming

Sony upgraded its annual net profit forecasts on Thursday, saying it expects strong results in its key gaming sector as the weak yen inflates profits on products sold abroad.

The Japanese electronics and entertainment giant said net profit in the April-December period jumped five percent year-on-year to 809 billion yen ($6.3 billion).

This was partly thanks to strong sales in the game, music and imaging-and-sensors sectors in the third quarter, an important holiday shopping period, the company said.

In the 2022-23 financial year, Sony Group now expects a net profit of 870 billion yen, up from the previous estimate of 840 billion yen.

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Its operating profit forecast is now 1.18 trillion yen, up from 1.16 trillion, with income in the gaming division “expected to be higher than the November forecast mainly due to the positive impact of foreign exchange rates”, the company said.

The Japanese currency has gained ground against the greenback in recent months but the dollar still buys around 128 yen, compared with around 114 yen a year ago.

Sony sold 12.8 million PlayStation 5 units in the first nine months of the current financial year, with 7.1 million of those shifted in October-December.

This year’s figure is already more than the 11.5 million sold in 2021-22, when supply chain problems slowed production of the next-generation console.

“Based on this performance, the company has set its full-year sales forecast for the current fiscal year at 19 million (PS5) units, and will work to sell as many units as possible to meet strong demand by optimising its operations,” chief financial officer Hiroki Totoki told reporters.

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“I believe user engagement is on the road to recovery thanks to the popularity of the PS5, and hit titles” like “God of War Ragnarok”, he said.

Executive reshuffle

Game sales will have an important bearing on Sony’s annual results, Hideki Yasuda of Toyo Securities told AFP.

“Sony is expected to aim for higher hardware sales in the coming fiscal year. What is key is whether software sales will also increase to keep up with higher hardware sales,” Yasuda said.

The PS5 has some major titles in the pipeline, including the “highly anticipated” game “Final Fantasy XVI”, he noted.

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Sony’s gaming rival Microsoft has sparked an industry battle with its acquisition of “Call of Duty” maker Activision Blizzard — a huge $69 billion purchase that has yet to be finalised while it is examined by antitrust authorities.

A year ago, weeks after Microsoft unveiled its acquisition plan, Sony said it would buy US game studio Bungie, creator of hits like “Halo” and “Destiny”.

Sony also announced a reshuffle at the top of the company on Thursday, with chief financial officer Totoki to also become president and chief operating officer.

Current company president and chief executive officer Kenichiro Yoshida will become board chairman and remain CEO.

The yen’s fall was helped by the contrast between the US Federal Reserve’s interest rate hikes and the Bank of Japan’s longstanding monetary easing programme.

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“Sony has a wide range of businesses, so the impact of foreign exchange changes are unevenly felt in various areas,” Yasuda said.

The company said sales in its pictures division were expected to be lower than previously forecast, partly because of “the impact of foreign exchange rates” which make it more expensive to produce films abroad. 

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Nepra approves Rs3.28 per unit increase in power tariff

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Nepra approves Rs3.28 per unit increase in power tariff

The National Electric Power Regulatory Authority (Nepra) has approved Rs3.28 per unit increase in power tariff on the account of fuel cost adjustment for fourth quarter of fiscal year 2022-23.

The regulatory body has sent his decision to the federal government for final approval. The increase in electricity prices will come into effect immediately after it is approved by the government.

The distribution companies (Discos) would recover Rs159 billion from consumers during the period of six months (October 2023 to March 2024).

The revised rate will be applicable on all customers.

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Inflation goes up as people feel effects of fuel price hikes

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Inflation goes up as people feel effects of fuel price hikes

Food and fuel prices continue fuelling inflation in Pakistan as the Sensitive Price Indicator (SPI) for the week ended September 21 witnessed a 0.93 per increase amid the complete government failure to check the rates.

Read more: Food prices owing to weaker rupee, supply shortages will push Pakistan inflation: ADB

The latest data released by the Pakistan Bureau of Statistics (PBS) shows that chicken price had jumped by 8.49pc followed by petrol 8.51pc, diesel 5.54pc garlic 5.19pc and onion 3.02pc.

At the same time, the year-on-year increase in SPI stood at 38.66pc when compared with the corresponding week of last year.

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Read more: More food inflation as fuel price hikes increase production, transportation costs

The rising inflation in Pakistan urgently needs government intervention and a study of how different governments are dealing with the challenge. Tax on cut on food items is one of methods.

Read more: Fighting the food inflation: From net-zero VAT to supermarkets seeking price cuts

Earlier this week, the Asian Development Bank (ADB) had warned that average inflation in Pakistan will soar to 29.2 per cent caused by supply shortages, continued currency depreciation, import restrictions, and fiscal stimulus for post-pandemic recovery.

Meanwhile, the rising food prices shouldn’t be a surprise given that the regular fuel price hikes are increasing the production and transportation costs.

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The main reason behind the persistent inflation in Pakistan is devaluation as the rupee had dropped to the record against the US dollar – a trend that is being reversed somewhat amid a crackdown on blacking marketers on hoarders.

However, the exchange rate is still too high, requiring further correction, as the people have also been hit hard for power and gas tariffs as the conditions set by the International Monetary Fund (IMF).
 

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Power tariff hikes: The more you devalue rupee, the more capacity charges you pay

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Power tariff hikes: The more you devalue rupee, the more capacity charges you pay

Devaluation – a process that started under former finance minister Miftah Ismail in late 2017 and late 2018 but gained momentum under the PTI government – is the root cause of inflation shouldn’t be a contested statement as it has made imports even more expensive for Pakistan.

And that’s countries like Pakistan are the worst affected due the rising commodities prices in global market as weaker currencies mean the overall impact is much deeper for them than the rest.

Read more: Rupee collapse is the reason behind all ills Pakistan is facing

This argument was endorsed by none other a high-ranking government official – Power Division Secretary Rashid Langrial who said on Monday that the capacity [charges] payment had doubled after the dollar exchange rate increased from Rs100 to Rs300, thus resulting in skyrocketing electricity tariffs for consumers. 

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