Japanese 5 Major Electric Cable Makers Post Y/Y Lower Profits in 1H F2011

Japanese major four electric cable makers out of 5 listed makers posted year-on-year lower consolidated recurring profits in the first half of fiscal 2011 started in April while SWCC Showa Holdings posted the loss. Demand for automotive components, such as automotive wiring harness, steadily recovered in July-September while extremely strong yen trend and demand downturn for electronic materials canceled the profit improvement.

Sumitomo Electric Industries (SEI), whose sales and profits largely depend on automotive industry, could post almost double recurring profit in July-September compared with the figure in April-June. SEI estimates even stronger demand recovery in the second half year. Meanwhile, negative impact of flood in Thailand is currently concerned.

Furukawa Electric’s half-year operating profit decreased by 1.2 billion yen due to strong yen trend in April-September from same period of a year earlier. Strong yen impact was 3.2 billion yen at Fujikura and 900 million yen at Hitachi Cable by year-on-year comparison. SWCC Showa Holdings posted foreign exchange recurring loss at approximately 400 million yen. Exporting products are mainly impacted such as optical network components or ultra high voltage power cables.

As for electronic materials adopted to digital and home appliances, demand decreased due to damages on supply chains after the Japan Earthquake in April-June and due to inventory adjustment in July-September, except for partially favorable demand related to smart phones.

SEI set its full-year financial forecast unchanged for fiscal 2011. Fujikura passed announcement of the full-year financial forecast since many group companies are located in Thailand and flood damage scale is still unforeseeable. The other three companies reviewed their full-year forecasts downward.