Japan Major 5 Electric Wire Makers Post Better Results in April-June

Japanese major 5 electric wire makers posted net profit for April-June while some makers posted loss a year earlier. Hitachi Cable and SWCC Showa Holdings posted first net profit in 8 quarters. The recovering sales for automobile and electronics improved their profitability and the demand is expected to keep firm in the second half of the year ending March 2011.

However, the demand could decrease in the second half when subsidiary for eco-friendly car purchase end in September and yen rate gets higher. The demand was still slow for construction applications in April-June. The major 5 makers’ operating profit in the quarter was still lower than April-June 2008 level.

Major automotive wiring harness maker of Sumitomo Electric Industries posted 15.8 billion yen of operating profit for automotive unit in April-June while the operating loss was 8.6 billion yen in same period of 2009. The sales increased by 52.8% to 236 billion yen. Furukawa Electric increased the operating profit target by 4 billion yen for fiscal 2010 due to higher sales of copper strip and rolled aluminium for semiconductor and automobile.

Fujikura posted 40.9% higher operating profit for telecommunications unit in April-June from same period of 2009 while the firm posted 100 million yen of operating profit for electronics and auto unit for April-June compared with 1.1 billion yen of loss in same period of 2009. Hitachi Cable posted operating loss for tape automated bonding business while the profitability improved due to higher sales for copper strip, magnet wire, electric wire for electronic appliance and automotive parts.

SWCC Showa Holdings posted recurring loss in April-June due to 276 million yen of foreign exchange loss while the sales recovered. Foreign exchange sensitivity in 1 yen per US dollar change is 800 million yen for Sumitomo Electric, 160 million yen for Furukawa Electric and 200 million yen for Hitachi Cable.

The major 5 makers’ operating profit was lower in April-June than the level in same period of 2008. However, the operating profit for the sales increased by around 0.5 percentage points for Furukawa Electric and Fujikura compared with same period of 2008 while Sumitomo Electric’s operating profit rate decreased only by 0.2 points to 4.1%. Hitachi Cable’s operating profit rate was 0.1% against 2.1% in April-June 2008 and SWCC Showa Holdings’ operating profit rate was 0.8% against 1.3% in same period of 2008.