[ 3rd Quarter of fiscal 2013 Performance Briefing ]Consolidated Results through 3Q of FY March, 2013
Consolidated Full Year Projections of FY March, 2013
Mr. Takehiro Kamigama
President & CEO
The very first slide looks into the Consolidated Results through 3Q of FY March 2013. Net sales were 631.0 billion yen; operating income, 25.5 billion yen; operating income margin, 4.0%; income before income tax, 21.2 billion yen; net income, 10.1 billion yen; and EPS, 80.59 yen. For the exchange rate, it was 80.03 yen to the dollar and 102.24 yen to the euro. Impact from currencies resulted in net sales increasing 2.5 billion yen and operating income increasing 0.4 billion yen.
Looking into Features in 3Q results of FY March 2013, the HDD market has been rather slow but we actually had growth in sales of HDD heads in terms of revenue and in terms of volume as well. Also for communication market sales, we actually grew 50% in 2Q. Communication products revenue in 2Q was 31.8 billion yen and increased in 3Q to 47.6 billion yen. Magnet sales were much lower than expected, expecially metal magnet for VCM used in HDD.
Next I would like to look into Consolidated Full Year Projections of FY March 2013. Unfortunately, I have to offer an apology. Projections announced on October 31, net sales were 850 billion yen but are, as of today, now 835 billion yen; operating income was 41 billion yen and is now 19 billion yen; income before income taxes was 37 billion yen and is now 14 billion yen; and net income was 20 billion yen and is now 2 billion yen. I owe you an apology as we had to reduce our forecasts dramatically. As for the exchange rate, US dollars were at 85 yen and the euro was at 115 yen. I will go into details on the causes of the poor performance in 4Q. In 4Q, a certain customer actually lost their speed that gave us an impact; the HDD market slowed down; inventory needed an adjustment; HDD head and passive components actually gave us a declined in volume, pushing our revenue quite dramatically; and the inventory adjustment was another service blow; because of that, in 4Q, there was a 65 billion yen loss according to our estimates so we had to make drastic reductions in our numbers; my apologies again.
All in all, the FY March 2013 Dividend Forecast is going to be as follows. The interim dividend, we announced that being 40 yen, but this time that is going to be reduced by 10 yen, so the year-end dividend is going to become 30 yen. So all-in-all, annual dividend for the fiscal year, while the previous forecast was 80 yen, that is going to be reduced to 70 yen, down by 10 yen. Again, I would like to offer you an apology for this.
Of course we have been working on the business portfolio improvement, and I believe that we have to accelerate our improvements. Now I would like to introduce three important pillars. The first important activity is to do with the accelerated revision of our business portfolio. As of today, I simply cannot give you too much detail as to what are the specific details we are talking about, but by the next earnings announcement we should be ready to give you the details.
The second point has to do with optimizing production bases. In the previous meeting last year, we had consolidation particularly in the capacitor businesses, so we actually carried out consolidation in the Tohoku region. Some activities are still yet to come so it is very important for me to further accelerate this activity including the bases not already announced for integration .
Third, we need to improve management efficiency. We have to establish schemes and the organizations as soon as possible so that we can become truly up to the point in executing our important strategies during FY March 2014. It is very important for us to be responsive in executing business strategies. We have to come up with priorities in terms of business operations and also need to improve cost structure.
Sorry, I know all three points sound somewhat abstract, but I am here to tell you clearly that we are going to go for very drastic measures. And believing in that, it is very important for us to become a lot more responsive moving into the next fiscal year. This concludes my presentation.
