Hitachi Cable Reviews Full-Year Result Forecast Largely Downward

Hitachi Cable announced on Tuesday the firm revised down its full-year consolidated financial result forecast for fiscal 2010 ending in March 2011, decreasing widely from the previous forecast released in October 2010. Full-year profit will lower by deferred shipment of submarine optical fiber cable, slowdown in semiconductor and electronics market as well as sales decrease of COF (chip on film). Strong yen trend and high copper cost also impact the group’s financial result. Business conditions are severe in the second half year though Hitachi Cable aims to recover full-year recurring profit in fiscal 2010 after 2-year losses in fiscal 2008-2009.

Hitachi Cable revised down its full-year net sales forecast to 420 billion yen from previously announced 430 billion yen. Operating profit was reviewed to 2.3 billion yen from previous 8 billion yen. Recurring profit is now estimated at 1.8 billion yen against previous 7 billion yen. The firm posted consolidated net loss for nine months of April-December 2010 due to 1.1 billion yen of consolidated operating loss for October-December.

Mr. Yoshiaki Yoneda, vice president of Hitachi Cable, explained at a press conference on Tuesday sales and profits for October-December were not so strong as expected and the business circumstances are unlikely to improve widely for January-March.

He explained large-scale shipment of submarine optical fiber cable was scheduled in the second half year but the shipment was deferred to fiscal 2011. Semiconductor and electronics industry entered adjustment phase in mid 2010. Moreover, Hitachi Cable’s COF sales largely decreased after the company’s announcement of withdrawal from COF business in late November. Wireless system sales also turned weak.

Strong yen trend impacted the company’s 9-month consolidated operating profit by 1 billion yen compared with the same period of fiscal 2009. Impact of high copper price was 1.6 billion yen.