Mixed Half-Year results from Japan’s major PM companies
November 28, 2012
The three major conglomerates in Japan which include PM component production, recently reported their half year group sales to September 30, 2012.
The mixed results show continuing signs of recovery from the problems associated with the earthquake early in 2011, but also reflect the adverse effects of a slow down in the global economy and the deteriorating relationship of Japan and China.
Mitsubishi Materials Corp. (MMC) reported a 14% drop in group sales to Yen 635,636 billion ($7.763 billion) in the first half (April – September 2012) of the current fiscal year, and a 26.9% drop in net income to Yen 16,278 billion ($198.8 million). MMC is forecasting a drop of around 10% in sales for the whole financial year ending March 31, 2013 to Yen 1,300,000 billion ($15.9 billion).
The main reason for the sharp decline in sales in the first half was attributed to reduction in copper refining both in Japan and in Indonesia and the drop in copper prices.
The ‘Advanced Materials & Tools’ division of MMC, which includes structural PM parts, bearings, and cemented carbide tools, recorded a 4.1% drop in sales to Yen 73.4 billion ($897 million), and a 28.4% drop in ordinary income to Yen 7.8 billion ($95 million).
Hitachi Chemicals Co Ltd reported a 2.7% drop in group sales to Yen 234,043 billion ($2.859 billion) in its first half period compared with the same period in 2011. Net profit increased by 8.4% to Yen 9,001 billion due mainly to compensation payment received as a result of the accident at the Fukushima Dai-ichi Nuclear Power Plant.
In the Advanced Components & Systems division sales of both sintered friction materials and PM parts increased compared with the same period in 2011, but overall division sales which also include plastic moulded products, vehicle batteries and electronic components, decreased by around 2% to Yen 109,907 billion ($1.343 billion). Profit for this division sank by 38% to Yen 1,489 billion ($18.1 million).
Sumitomo Electric bucked the negative trend with a 8.7% increase in group sales to Yen 1,042,775 billion ($12.7 billion) in the period April to September 2012, but recorded a 7.2% drop in net income to Yen 15,805 billion (($193 million).
Around 50% of group sales are derived from the Automotive Division which supplies wiring harnesses to the automotive sector. Sales in the ‘Industrial Materials & Others’ division barely changed in the 6 month period compared with 2011, reaching Yen 137.5 billion ($1.680 billion).
Sintered parts sales increased by 19% to Yen 21.7 billion ($265 million) whilst cemented carbides increased by 3.4% to Yen 35.9 billion ($438.5 million). The A.L.M.T. segment in this division produces W, Mo, heavy metal, diamond tools and cemented carbides, and turned in sales of Yen 20 billion ($244.3 million), a decrease of 13% on the same period in 2011.
Powder metallurgy producer Fine Sinter Co Ltd reported a healthy 14.5% increase in sales in the first half reaching Yen 17,998 billion ($219.8 million). The company affirmed its consolidated full-year outlook (ending March 2013) for revenue of Yen 35,400 million, but lowered the outlook for net profit from Y 1,200 million to Y 1,000 million ($12.2 million). The company lowered the outlook due to the decreased sales in China, as well as the increased cost in overseas-based subsidiaries.
The company announced that it established a new 95%-owned subsidiary in Indonesia in September 2012, Fine Sinter Indonesia, to manufacture and sell powder metallurgy products. Fine Sinter supplied 86.5% of its production to the automotive sector in 2011 (Fig.1).
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