 | President's Message |
|---|---|
| Mid-Term Management Plan |
| Executives |
| Corporate Governance |
| Declaration for Timely Disclosure |
| Risk Factors |
 | Disclosure Policy |
President's Message
Business Results for the Second Quarter Ended September 30, 2011
In the global economy during the first half of FY 2011, the six-month period from April 1 through September 30, 2011, economic recovery decelerated with the impact of financial crisis in Europe and economic downturn in the U.S., although China, India and some other emerging countries remained strong supported by their internal demand. Japan saw tentative recovery within exports and productions, which had been largely affected by the Great East Japan Earthquake, however, full-scale recovery has yet to be seen due to overseas economic slowdown and appreciation of the yen starting in the latter half of the period.
For the market surrounding Nippon Chemi-Con Group, demand for electronic components increased temporarily with concerns over supply shortages, however, inventory adjustment started to take place in the latter half of the period. The situation remained extremely severe, accompanied with decrease in demand for consumer electronics equipment.
In this business environment, while being subject to reduce production activities temporarily affected by the Great East Japan Earthquake, Nippon Chemi-Con Group strived to ensure sales by increasing production overseas and actively promoting selling of inventories. We also exerted efforts to ensure profits by thoroughly addressing group-wide cost reduction and selling price maintenance.
As for new products in this period, we enhanced lineup of snap-in type aluminum electrolytic capacitors for PV power conditioners and conductive polymer capacitors with reduced height for notebook PC.
With regard to the Great East Japan Earthquake, Nippon Chemi-Con Group put utmost efforts for swift recovery of the damaged production bases. Production at 12 bases in Tohoku area and Takahagi prefecture were suspended right after the earthquake. One by one, we resumed production at bases with minimal damage, and by April 1, 10 production bases except for Nippon Chemi-Con Takahagi Plant (Takahagi-city, Ibaraki prefecture) and Chemi-Con Miyagi Corporation (Osaki-city, Miyagi prefecture) resumed production. Partial production started at Takahagi Plant and Chemi-Con Miyagi in April, and our production status at all our bases returned back to normal as of May 19.
As a consequence, consolidated financial results for the six months ended September 30,2011 recorded net sales of 56.9 billion yen (a decrease of 13.3% year on year), operating income of 2.088 billion yen (a decrease of 48.0% year on year), and ordinary income of 1.231 billion yen (a decrease of 55.7% year on year). Net loss recorded 789 million yen (net profit of 1.658 billion yen in the same period of the previous year), including extraordinary loss related to the Great East Japan Earthquake.
In view of the situation, Nippon Chemi-Con deeply regrets that it has decided to pay no interim dividend. Your understanding and continued support will be much appreciated.
Results by segment
The following presents a breakdown of sales by segment.
- Capacitors (51.048 billion yen, accounting for 89.7% of total net sales)
Sales of capacitors decreased by 10.1% year on year mainly due to decrease in demand for PC and consumer electronics, which had been strong in China and other Asian market, as well as decrease in inverters and industrial equipment applications. - Electro-Mechanical Components (1.528 billion yen, accounting for 2.7% of total net sales)
Sales of electro-mechanical components decreased by 13.5% year on year mainly due to decrease in sales of CMOS camera modules. - Capacitor Materials (3.164 billion yen, accounting for 5.6% of total net sales)
Sales of capacitor materials decreased by 10.5% year on year mainly due to decrease in demand for aluminum electrolytic capacitors electrode foils in Japan and Asian market. - Other Products (1.158 billion yen, accounting for 2.0% of total net sales)
Sales of other products decreased by 67.7% year on year mainly due to changing of CU TECH Corporation from Nippon Chemi-Con's consolidated affiliate to equity method affiliate, though sales of resale products increased.
Forecast for the full-year
Business environment is expected to remain severe with concerns over further economic slowdown and strong yen trend. Under the sixth mid-term management plan launched on April 2011, Nippon Chemi-Con Group will reinforce business structure and focus on sales promotion and product development aimed toward its strategic markets; ICT, automotive electronics, new energy, industrial use inverter, and home appliances market.
For the aim to enhance overseas business activities mainly for emerging markets, we will strengthen product planning to meet the needs from overseas market by opening new overseas R&D office, and will expand sales network in inland China, India, Vietnam and Brazil.
With respect to new businesses, we will make full fledged entry to automotive electronics market for EDLC (electric double layer capacitors) business. Leveraging Nippon Chemi-Con Group's material development power, we will explore into new materials business fields by pushing forward R&D of nano-materials for next generation batteries materials and capacitor electrode materials.
For foreign currency risk, we will continue to re-examine currencies for sales, increase overseas production ratio and increase foreign currency procurement ratio. From the point of new products development, we will focus on development of high-value-added products to reduce foreign currency risk.
For consolidated results forecast for FY 2011 ending March 31, 2012, we forecast net sales of 122 billion yen (a decrease of 4.5% year on year), operating income of 4.7 billion yen (a decrease of 42.4% year on year), ordinary income of 4 billion yen (a decrease of 40.7% year on year), and net income of 1.5 billion yen (a decrease of 54.5% year on year), based on the exchange rate of 77 yen against the US dollar in the second half.
Ikuo Uchiyama, President
