Furukawa Electric Posts First Profit for Optical Fiber Unit in 5 Years

Furukawa Electric announced on Thursday the firm posted 2.6 billion yen of consolidated operating profit for optical fiber and cable business in first half of fiscal 2006 ending March 2007, which improved by 3.9 billion yen from 1H of fiscal 2005 and became to the first operating profit in 5 years. Demand was active for optical fiber, optical cable and optical components at home and overseas. The US subsidiary, OFS also gained operating profit in 1H of fiscal 2006 for the first time since the subsidiary was acquired by Furukawa Electric in 2001 and contributed to the profit improvement of the parent.Furukawa Electric posted 515.736 billion yen of consolidated net sales, 23.889 billion yen of operating profit and 14.819 billion yen of net profit in 1H of fiscal 2006. The sales increased by 28% from the same period of fiscal 2005, the operating profit by 57% and the net profit to 5.6 times. Operating profit especially improved for telecommunication business unit including optical fiber and cable business, which increased to 6.7 billion yen or 6.1 times of the same period of fiscal 2005. Operating profit of telecom business unit was secondly highest following 6.9 billion yen of light metals business unit.Telecom related demand increased for optical fiber cable used for telecommunication, cellular phone and railroad in domestic market. Demand has improved for optical drop cable used for optical network to household since spring 2006 at overseas mainly in US market. OFS, the subsidiary to produce optical fiber and cable in USA, could gain first operating profit in 1H, while the company canceled operating loss in 1Q. Accounts were also favorable at telecom related subsidiaries in Brazil and Thailand.