Citing Effects of Stronger Yen, Konica Minolta Reports Lower Revenues and Profits

Yesterday, Konica Minolta of Japan announced financial results for its nine-month fiscal period of April 1 to December 31, 2016, with revenue down 8.2 percent, operating profit down 17.2 percent,  and profits down 5.4 percent, all versus the previous-year period.

As Canon Inc. recently stated (see story here), Konica Minolta said sales were affected by the appreciated Japanese yen.

In its Business Technologies group, revenues were down 8.7 percent year-over-year, with operating profit down 25.1 percent. If the effects of the stronger yen are excluded, revenue would be up 3.7 percent and operating profit up 5.8 percent year-over-year.

The firm says that its sales of mainstay products that it’s working to establish as “Genre-top” products – such as high-end color products in the Business Technologies Business and digital products in the Healthcare Business – were strong, but sales weren’t sufficient to completely offset the impact of the stronger yen, and revenues fell. In the Industrial Business as well, revenue continued to decline on the back of a deteriorating end-product market.

In Konica Minolta’s Business Technologies Business, rising sales of high-end color products and other factors led to an improvement in the gross profit ratio, but the impact of the stronger yen against European currencies is said to have been significant and led to a decline in profit.

Sales of mainstay A3 color coper/MFPs “also remained strong” during the nine-month period, and sales volumes “exceeded previous-year levels in all regions.” The highest rates of growth were shown by high-end models in terms of product segment and by Europe and China in terms of sales region.

The firm stated that although the “environment remains intensely competitive, especially in North America,” by expanding its content-management services, including document-digitization support services, it’s managed to “win large-scale orders from customers associated with governmental and public agencies.”

Commercial and Industrial Printing

In its production-printer business, the flagship Konica Mionlta bizhub PRESS C1100 digital color printing system “continued to post solid sales, and growth was marked in North America, China, and Asia.” Business discussions for the firm’s new AccurioJet KM-1 digital inkjet press “gathered momentum in all regions, and the rollout to the market began in earnest.”

In industrial inkjet, components such as inkjet print heads “saw a slowing of sales due to deteriorating market conditions, but in textile printers the “Nassenger SP-1,” which achieves high productivity through the use of single-pass technology, won orders in France and Turkey and contributed to a rise in revenue.”

As a result, revenue of the Business Technologies Business was  ¥562.2 billion, down 8.7 percent year-over-year and operating profit was ¥38.1 billion, down 25.1 percent year-over-year. Excluding the impact of exchange rates in the period under review, revenue grew by 3.7 percent year-over-year and operating profit rose by 5.8 percent year-over-year.

Forecast

Konica Minolta has made any changes to its forecasts announced on July 28, 2016.

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