Furukawa Electric Reviews Full-Year Profit Forecast Widely Downward for F2011

Furukawa Electric announced on Friday the firm reviewed its full-year consolidated operating profit forecast largely downward to 17 billion yen from previously estimated 31 billion yen for fiscal 2011 ending in March 2012. The firm forecasted negative impact of flood in Thailand at 5 billion yen and other factors, extremely strong yen trend and economic slowdown at 9 billion yen. Telecommunication business unit represented the largest profit down at 4.5 billion yen, in which impact of Thai flood represents 3 billion yen. Full-year net sales forecast was reviewed downward to 935 billion yen from previous 950 billion yen.

Profit down by Thai flood is 3 billion yen in telecom business unit, 1 billion yen in electronics & automotive system business unit, 600 million yen in light metal (aluminium) business unit and 400 million yen in metal (copper rolled products) business unit. In telecom business unit, a large-lot plant of laser diode for optical amplifier is submerged by flood and Furukawa Electric is preparing for alternate production in Japan. In metal business unit, a copper strip plating plant is also submerged and partial alternate production is planned in Japan.

As for other segments and products, Thai sites are not directly damaged by flood or there is no local productive site in Thailand such for copper tube for air conditioners, automotive wiring harness and aluminium blank for hard disc. However, half-year sales of these products may decrease from originally planned since the users are damaged by flood.

Furukawa Electric reviewed its full-year operating forecast downward by total 14 billion yen for fiscal 2011. By segments, profit forecast was reviewed down by 4 billion yen in light metals, 3 billion yen in energy & industrial products and 2 billion yen in metals. The profit forecast was unchanged for electronics & automotive systems along car makers’ production recovery.