Hitachi Cable to Post Loss for F2008, to Restructure Operations

Hitachi Cable announced on Thursday the firm will post 5 billion yen of consolidated net loss for the year ending March 2009 while the firm announced as of July 29 the net profit would be 9.8 billion yen. The firm revised the outlook downward to 1 billion yen of operating profit and recurring profit, which is more than 90% lower than previous outlook, due to inventory loss for copper and lower shipment and selling price for semiconductors and automobiles.

The firm launches a restructuring plan for 4 areas including reshuffle of tape automated bonding (TAB), consolidation of offshore operations, freeze of some capital expenditure projects and fixed assets reduction. The firm tries to improve the business portfolio when the firm depends heavily on semiconductor industry.

The firm stops production of chip on film (COF) for liquid crystal panels at Kofu plant, consolidating the production into other 2 plants in Japan. The output capacity decreases by 20-30%. The firm eyes potential shutdown of Kentucky plant for brake hoses and consolidates the production into other 3 plants in North America.

The firm posted 4.2 billion yen of consolidated recurring profit for the half year to September, which was 62% lower than the same period of 2007. The firm was suffered from lower demand and price for semiconductors and automobiles along with higher depreciation due to tax system revision.