21.04.2006 10:25

TOKYO (AFX) - NEC Electronics Corp said it now expects to incur a bigger net loss of 98 bln yen in the year ended March 31 instead of its

previously estimated loss of 20 bln yen as it set aside provisions to clean up its balance sheet.

Among others, the company said it will book 70 bln yen in provisions for deferred tax assets held by its domestic units and affiliates.

`With this accounting treatment, aimed at disposing bad debt, we are now bracing for a turnaround,` NEC Electronics executive officer Hiroshi Sato said at a news conference.

The semiconductor making unit of NEC Corp said it also booked an undisclosed sum of provision for settling a lawsuit filed in the US.???

NEC Electronics and Elpida Memory Inc, among other chip makers, have been accused of conspiring to eliminate competition by fixing the price of DRAMs between July 1999 and June 2002.

In addition, the company said it took 9 bln yen in charges to write down the impaired value of research and development assets that it bought from unnamed firms.

`If we eliminate this special provision, our operating loss should have narrowed to 27 bln yen from the previously estimated loss of 33 bln yen in line with rising sales,` Sato said.

`Although we booked provisions to clean up our balance sheet, resulting in a bigger loss, we think our business is now beginning to recover,` he added.

AS a result, NEC Electronics said its revenue rose 2 pct to 162 bln yen in the fourth quarter to March from a year earlier, the first increase in six quarters.

`Cellular-phone-use LSI (large scale integrated circuits) and PC-use semiconductor chips are now selling better than we had earlier estimated,` Sato said.

Following the profit warning at its 65 pct owned semiconductor unit, NEC Corp trimmed its net profit forecast for the year ended March 31 to 13 bln yen from 60 bln yen.