Furukawa Electric Forecasts 4.1B yen Operating Profit Down in F2011

Furukawa Electric announced on Tuesday the firm forecasts its full-year consolidated operating profit would decrease by 4.1 billion yen to 31 billion yen in fiscal 2011 (April 2011-March 2012) compared with the previous fiscal year. The firm estimates Japan Earthquake would affect the profit negatively by total 2 billion yen while the profit would also be lowered by cost upsurge for fuels and substantial materials by total 3.5 billion yen. The six-month profit is expected to improve in the second half year, 10 billion yen in the first six months and 21 billion yen in the latter six months. The full-year consolidated net sales are forecasted to increase by 24.2 billion yen to 950 billion yen.

As for negative and positive effects of Japan Earthquake, Furukawa Electric estimated the full-year operating profit would be lowered by 3.5 billion yen due to the demand decline mainly from automobile industry while the profit would be pulled up by 1.5 billion yen along with the demand emergence related to restorations and reconstructions. Other negative factors include cost upsurge for fuels and submaterials by total 3.5 billion yen and worse metal position by total 2.4 billion yen. Positive factors include sales increase and product mix improvement by total 4.2 billion yen.

Mr. Masao Yoshida, Furukawa Electric’s president, attended a press conference on Tuesday and explained the firm plans to keep normal operating level at domestic production sites this summer despite of 25% electricity saving efforts in TEPCO’s service area. Mr. Yoshida suggested transfer of some operations from several plants in East Japan to Mie plant in West Japan such for semiconductor process tape and bare copper wire. In Nikko plant mainly for copper alloy products and Imaichi plant for electrolytic copper foil, the firm will utilize the hydropower generating subsidiary and private electric generators.

In fiscal 2010, Furukawa Electric’s full-year consolidated operating profit was lowered by total 1 billion yen due to Japan Earthquake. The firm posted extraordinary loss related to the disaster at 2.6 billion yen mainly for repair of damaged facilities.