March 19 (Bloomberg) -- Sharp Corp., the unprofitable Japanese television maker, affirmed its target for a second-half operating profit as it gets orders from Samsung Electronics Co. and tries to meet a condition of bank loans and share sales.
“We’re going ahead with a target to post an operating profit in the second half,” Miyuki Nakayama, a Tokyo-based spokeswoman for Sharp, said by phone today. The electronics maker agreed this month to supply liquid-crystal displays to Samsung, including large-sized TV panels, as part of a tieup.
Qualcomm Inc.’s agreement to pay 5 billion yen ($52 million) of a 9.9 billion yen total investment in the Osaka-based company partly depends on a profit in the six months ending March 31, the companies said in December. Becoming profitable is a condition for an extension of 360 billion yen of loans to Sharp due June 30, a person with direct knowledge of the matter said in January.
Sharp expects a record full-year net loss of 450 billion yen and is seeking to raise funds after failing to conclude a 132.5 billion deal with Foxconn Technology Group and its billionaire founder Terry Gou after almost a year of talks.
Sharp expects a second-half operating profit on orders from Samsung, Asahi reported earlier today, without attribution.
Shares of Sharp were unchanged at 307 yen at the close of trading in Tokyo. The stock has gained 1.3 percent this year, compared with a 20 percent rise in the benchmark Nikkei 225 Stock Average.
Sharp said yesterday Qualcomm’s 5 billion-yen payment was delayed after it couldn’t meet terms of their original agreement, including developing production technology for its Micro Electro Mechanical System displays.
An initial 4.9 billion yen investment by Qualcomm was completed in December.
Samsung agreed to acquire 3 percent of Sharp for 10.6 billion yen on March 6 as it accelerates a shift toward higher-end TV sets using organic light-emitting diode technology, or OLED, which offer sharper, brighter images while consuming less power.
The Suwon, South Korea-based company, which already buys screens from Sharp, agreed to the tieup to secure liquid-crystal displays for smartphones and TVs.
Sharp lost 55 percent of its market value last year and warned in November there was “material doubt” about its ability to survive after hemorrhaging 103 billion yen in cash from operations in the fiscal first half.
To contact the reporter on this story: Naoko Fujimura in Tokyo at firstname.lastname@example.org
To contact the editor responsible for this story: Michael Tighe at email@example.com