Panasonic sees record profit on robust battery demand, U.S. tax credit

TOKYO (Reuters) -Japan’s Panasonic (OTC:) Holdings Corp on Wednesday said it expects net profit to rise to a record high this year on robust auto battery sales and a hefty tax credit in the United States.

The industrial conglomerate, which supplies batteries to U.S. electric vehicle (EV) leader Tesla (NASDAQ:) Inc, is expanding its energy business just as persistently high inflation rates worldwide dampen consumer sentiment.

Panasonic predicts net profit will grow 32% from a year earlier to a record 350 billion yen ($2.59 billion) as it expects a tax credit for EV battery operations under the U.S. Inflation Reduction Act to boost its bottom line by 100 billion yen.

The net profit outlook would be up 23% from the prior record for net profit of 284.1 billion yen, set in the year ending in March 2019.

The company sees operating profit of 430 billion yen for the year through March 2024, versus 288.6 billion yen a year earlier. That beats the 383.96 billion yen average of 20 analyst estimates compiled by Refinitiv.

For the fourth quarter of the year ended March 31, Panasonic posted operating profit of 54.4 billion yen. That compared with 83.4 billion yen a year prior and the 59.49 billion yen average of 12 analyst estimates.

($1 = 135.0500 yen)