Ryobi’s Die Casting Order Receipt Decreases after October

Ryobi announced its half-year result to September 2008 on 25 November and explained the firm’s die casting order receipt is decreasing in and after October at home and overseas. Die casting demand is impacted by automobile market stagnancy. Susumu Yoshikawa, president of Ryobi, said the firm might need to revise down its estimation of full-year consolidated account for fiscal 2008 more than the present.

Ryobi posted consolidated net sales at 103.9 billion yen for a half year to September 2008, down by 2.1% compared with the corresponding period of 2007. Die casting production is slowing down in and after October.

Order receipt volume is decreasing at RDCM, Ryobi’s productive subsidiary in Mexico started operation in August 2008, due to General Motor’s worse condition. The subsidiary originally aimed annual revenue at 4.2 billion yen for fiscal 2009 ending March 2010. However, the revenue may not reach 2 billion yen unless North American auto market recovers soon.

At another subsidiary in Dalian, China, the annual revenue is estimated to decrease to 500 million yen for fiscal 2008 from previously estimated 600 million yen with less demand from Shanghai GM. Ryobi revised down the annual revenue estimation of Dalian subsidiary to 1 billion yen for fiscal 2009 from previously expected 1.8 billion yen.

Ryobi will also shrink its annual capex plan for die casting business unit to 12 billion yen through fiscal 2008 from originally planned 14 billion yen.