Sharp has warned of "material doubt" about whether it can continue as a going concern, as its access to short-term financing becomes limited. The announcement was made alongside results for the fiscal first half to 30 September. These showed sales in line with its forecast for JPY 1.1 trillion, but the net loss of JPY 387.5 billion was much worse than expected, due to a range of restructuring charges, inventory and asset writedowns mainly in LCDs and reversal of deferred tax assets. The company had cash remaining of JPY 221 billion at the end of September, and Sharp said it now expects a net loss of JPY 450 billion for the full year, or JPY 200 billion worse than earlier forecast. Sharp plans a range of restructuring measures, including voluntary retirement and cutting salaries, reducing inventories, selling assets and reducing capital investments. It remains in talks with China's Hon Hai Precision Industry on a capital investment, as well with banks on a new credit facility. Sharp said negative free cash flow bottomed out in the second half of the last fiscal year and should turn positive in the second half of this year. The debt peak came in September this year at JPY 1.2 trillion, the company estimates, and the amount is expected to drop by JPY 180 billion by March 2013.
