Hitachi Cable Targets Record Profit in New 3-Year Growth Plan

Hitachi Cable announced Friday the firm targets 5% consolidated recurring profit on sales in fiscal 2012 under new 3-year plan started in April 2010. The firm targets record level of 25 billion yen of recurring profit in fiscal 2012 compared with 4.9 billion yen of loss in fiscal 2009. The firm focuses the resource into offshore infrastructure business. The firm expands the offshore sales rate from recent 25-30% to 38% in the 3-year plan.

The firm targets 500 billion yen of consolidated sales in fiscal 2012 compared with 372.5 billion yen in fiscal 2009. The recurring profit target is higher than recent peak of just more than 20 billion yen in fiscal 2006 and 2007.

The firm tries to expand the business in power infrastructure and next generation energy industry, industrial infrastructure and information and communication infrastructure. The firm secures 320 billion yen of sales and 18 billion yen of recurring profit in the areas compared with 213 billion yen of sales and 1.8 billion yen of recurring profit in fiscal 2009 for the areas.

The firm tries to improve the profitability by focusing the resources into growing business areas. The firm reshuffles business in other areas including electronics, semiconductor and automobile industry by shifting to profitable products and restructuring loss making businesses. The firm studies production cut for domestic tube plants and reorganization of offshore lead frame network.

The firm plans 54 billion yen of capital expenditure in 3-year plan compared with around 20 billion yen of annual depreciation. The firm focuses the investment into electric wire and cable business while the investment for high performance materials had heavy weight in recent years.