Favorable Annual Results for Japan Major 6 Electric Wire Makers

Japanese major 6 electric wire makers posted higher consolidated recurring profit for fiscal 2005 ended March 2006 from fiscal 2004 due to better activity of communication industry and high level demand from automobile industry. Sumitomo Electric Industries, Furukawa Electric and Fujikura regained profitability for communication units while Furukawa Electric and Fujikura posted profit for the all units for the first time since fiscal 2000. Mitsubishi Cable Industries posted the first profit in 6 years. Three of them increase the annual dividend while 2 firms resume dividend. They enjoyed favorable market condition for the communication units when domestic and US major communication carriers expanded capital expenditure for optical fiber network for household. The major electric wire makers increased optical devices and parts for the industry than expected. However, the profitability for their optical fiber cable business is still on the way to recover and the profit is lower than for optical devices and parts. They reported higher copper sales lifted the annual sales in fiscal 2005 from fiscal 2004. The impact was 50 billion yen for Sumitomo Electric, 23 billion yen for Fujikura, 25.5 billion yen for Hitachi Cable and 13 billion yen for SWCC Showa Holdings. The negative impact on the profit was 1.2 billion yen for Hitachi Cable and 400-500 million yen for SWCC Showa Holdings. They were suffered from higher cost for copper and raw materials when they couldn’t pass the higher cost price on the selling price fully, especially for industrial electric cable business in fiscal 2005. However, they could cancel a part of the negative impacts by increasing sales volume to meet higher demand for electric wire.