Mr Tokunaka has high hopes for the future

"Aided by the depreciation of the yen, Sony achieved the largest consolidated sales in our history," the company said.

But the company's profits slipped after it was hit by tighter margins for electronic goods, bloated inventories, large restructuring costs and a fall in the value of its share holdings in Japan.

"Looking back, the last fiscal year was one of the most difficult times, an especially tough year for electronics, and we were forced to issue profit warnings twice," said chief financial officer Teruhisa Tokunaka.

Profit boost

Sony's pre-tax profits dived 65% lower to 92.8bn yen (�490m; $720m) during the year to March on sales of 7.578bn yen.

But the group predicted that this year should prove much more profitable, thanks to changes being made within the electronics giant.

"Since we expect the severe economic environment to continue in the next fiscal year, we aim to raise our level of profitability through further restructuring of the entire Sony Group," said chairman and chief executive Nobuyuki Idei.

New highs

Sony predicted that its group pre-tax profits should more than treble to 310bn yen in the year to March 2003.

Its net profits, which fell 8.6% to 15.3bn, should exceed 150bn yen by March next year, the group predicted.

Even sales should rise in the months ahead, Sony predicted, to more than 8,000bn yen.

During the last fiscal year, a fall in the value of shares owned by Sony hit its profits, as did the 7.4bn cost of spinning off its mobile phone unit into a joint venture with Ericsson.

Playstation 2

Sony's games division enjoyed sales in excess of 1,000bn yen during the last year, mainly due to its fast selling Playstation 2 video games console.

Mr Idei said the console "gained stature" during the year, thus boosting sales of linked software.

"Going forward, in addition to expanding the game business, we will increase profitability by fully utilising the business opportunity expanding potential of all the hardware in the Sony Group," said Mr Idei.