Japan Major 5 Electric Wire Makers Secure Recurring Profit in 1H F2010

Japanese all 5 major electric wire makers secured half year consolidated recurring profit for the first time in 2 years thanks to demand recovery and better cost structure after restructuring. Fujikura secured recurring profit in first half of fiscal 2010 started April as same period of fiscal 2009 while other 4 makers regained the profitability while they posted loss in same period of fiscal 2009. They expect the demand condition will keep firm in the second half despite of the negative factors including slower demand for automobile and electronics and higher yen rate.

The 5 makers posted recurring loss in second half of fiscal 2008. Fujikura regained profitability in first half of fiscal 2009 while Sumitomo Electric Industries and Furukawa Electric also regained profitability in second half of fiscal 2009. Hitachi Cable and SWCC Showa Holdings finally regained profitability in first half of fiscal 2010.

Higher demand for automobile and electronics lifted their profitability. However, electronics industry turned into inventory adjustment phase for liquid crystal panel television, semiconductor and hard disc drive since August. The makers’ electric wire shipment was still low for domestic commodity grade construction cable. Their optical fiber cable shipment was strong for export to China and Asian countries and domestic communication network.

The demand will decrease for automobile wiring harness after the subsidiary ended for eco-friendly car in September. The electric wire makers’ profitability could be lower in the second half of the year due to lower demand for electronics and higher yen rate. The makers try to improve the profitability by reducing cost more. Fujikura, Hitachi Cable and SWCC Showa Holdings revised the full year profit target downward while Sumitomo Electric and Furukawa Electric kept the former outlook.