SEI’s Targeted at 135B Yen Operationg Profit for F2012, President

Sumitomo Electric Industries (SEI) president Masayoshi Matsumoto presented at press conference on Friday SEI targets 135 billion yen of annual consolidated operating profit in fiscal 2012 started April. SEI set the profit target at 210 billion yen for fiscal 2012 in its 5-year management plan “12 Vision” while president Matsumoto explained the target is actually equivalent to 135 billion yen at today currency exchange rate. The company formally announced its yearly profit forecast at 110 billion yen on Friday, 26.5% increasing from fiscal 2011, but Mr. Matsumoto said the company tries to achieve 135 billion yen by aggressive sales expansion and additional cost reduction. The annual consolidated net sales were formally forecasted to increase by 6.8% to 2.2 trillion yen.

Automotive business unit forecasts the consolidated net sales increases by 8.9% to 1.08 trillion yen and the operating profit increases by 12.3% to 61 billion yen in fiscal 2012 from fiscal 2011. SEI plans to increase production capacity for automotive wiring harness, the business unit’s main item, in North Africa, Southeast Asia and Americas with 77 billion yen of annual capex along with automakers’ aggressive output expansion.

Electronics business unit forecasts the net sales increases by 29.2% to 240 billion yen and the operating profit expands by 2.7 times to 9 billion yen in fiscal 2012 from fiscal 2011. In fiscal 2011, sales of flexible print circuits (FPCs) increased by 55.6% to 115 billion yen from the previous year thanks to the favorable demand for smart phones. SEI plans to increase annual investment for FPC business by 3 billion yen to 11.3 billion yen in fiscal 2012 from fiscal 2011 to expand the output capacity at offshore market.

Information and communications business unit posted 5.9 billion yen of yearly operating loss in fiscal 2011. The business unit tries to gain 1 billion yen of annual operating profit in fiscal 2012 but the conditions are tough due to price down of optical and electronic devices as well as low profitability of export under strong yen trend. Mr. Matsumoto said the business unit might need some reorganization or shift of productive operations to overseas for better profitability.

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