During the fiscal year ended March 31, 2013, economy in the European countries remained weak affected by the debt crisis in Europe, while the U.S. economy showed signs of moderate recovery. Economy in China and other Asian countries also tended to slow down due to weak exports to Europe and the U.S. From the turn of the year, the Japanese economy showed partial recovery accompanied with expectations for the new government, however, overall economy remained weak as exports and production declined due to global economic downturn.
Market conditions surrounding Nippon Chemi-Con Group were extremely severe due to weak demand in digital appliances and other consumer electronics market and industrial equipment market.
Under these severe business conditions, Nippon Chemi-Con Group promoted structural reform since October last year. We set “Corporate structure that generates profit on net sales of 90 billion yen” as our goal, and implemented measures including elimination and consolidation of production facilities; reduction of personnel cost; freeze on investment in facilities in principle; inventory reduction; business selection and focus; and speeding-up of new product development. As part of the measures, Hidaka Electron Co., Ltd., a joint company of Nippon Chemi-Con and Nippon Denko Co., Ltd. which produced aluminum electrolytic capacitors electrode foils, was dissolved in March this year.
As for product development, we developed conductive polymer hybrid aluminum electrolytic capacitors with excellent withstand voltage and low resistance characteristics, and low height resin molded type conductive polymer aluminum solid capacitors. We also developed and launched onto the market new products optimized depending on the application, such as high reliable, high heat resistance aluminum electrolytic capacitors ideal for use in automotive-electronics applications. Supply of our electric double layer capacitors for passenger vehicle’s regenerative braking system has begun too. To enhance product development capabilities that meet the Chinese market needs, we established our first overseas R&D office, Chemi-Con Technical Center (Wuxi) Ltd. in Wuxi, Jiangsu Province, China last June.
As a consequence, consolidated financial results for the year ended March 31, 2013 recorded net sales of 92,959 million yen (a decrease of 7.3% year on year), operating loss of 6,990 million yen (operating loss of 2,596 million yen in the previous year), ordinary loss of 6,685 million yen (ordinary loss of 2,633 million yen in the previous year), and net loss of 9,252 million yen (net loss of 4,909 million yen in the previous year).
In view of this situation, Nippon Chemi-Con deeply regrets that it has decided to pay no year-end dividend. Your understanding and continued support will be much appreciated.
The following presents a breakdown of sales by segment.
Business environment is expected to remain uncertain in fiscal 2013 with concerns over European debt crisis and financial problems in the U.S., although there are expectations for modest recovery of the world economy.
Nippon Chemi-Con Group will continue to promote measures set in the structural reform, reinforce our corporate structure through reduction of fixed costs, and enhance earning power through launch of new products and new businesses.
For reinforcement of our corporate structure, we will rebuild our existing businesses’ earnings structure and reduce interest-bearing debt and inventories to strengthen our financial structure. To enhance earning power, we will expand electric double layer capacitors business, promote sales of new products including conductive polymer hybrid aluminum electrolytic capacitors and resin molded type conductive polymer aluminum solid capacitors. Leveraging our basic R&D strengths, we will also consider commercialization of lithium-ion battery electrode materials and transparent polymer electrode.
Nippon Chemi-Con Group will make concerted efforts to promptly implement structural reform and transform into a strong corporate structure.
For consolidated results forecast for fiscal 2013 ending March 31, 2014, we forecast net sales of 104 billion yen (an increase of 11.9% year on year), operating income of 5 billion yen (operating loss of 6.990 billion yen in the previous year), ordinary income of 3.6 billion yen (ordinary loss of 6.685 billion yen in the previous year), and net income of 2.7 billion yen (net loss of 9.252 billion yen in the previous year), based on the exchange rate of 90 yen against the U.S. dollar.