Sales Up, But Profits Down for Kyocera
Kyocera Company of Japan recently reported results for its third quarter (the nine months ending December 31, 2019), with sales revenue increasing by 69,401 million yen, or 6.1 percent, to 1,214,417 million yen, compared with the previous nine months, marking record highs in sales for this nine-month period for two consecutive years.
Sales increased for the Electronic Devices Group and the Industrial & Automotive Components Group as well as for the Document Solutions Group, due in part to contributions from aggressive merger and acquisitions.
However, profits decreased as compared with the previous nine months, due to the recording of settlement expenses in the amount of 52,313 million yen relating to long-term purchase agreements for procurement of polysilicon material for the company’s solar energy business, and due to the recording of impairment loss relating to machinery, equipmen,t and goodwill in the organic materials business in the amount of 16,184 million yen. Kyocera stated that this more than offset the effects of increased sales revenue and cost reductions efforts in each division.
For this reason, operating profit decreased by 47,746 million yen, or 44.1 percent, to 60,576 million yen; profit before income taxes decreased by 43,162 million yen, or 29.3 percent, to 104,100 million yen; and profit attributable to owners of the parent decreased by 13,669 million yen, or 14.7 percent, to 79,419 million yen, compared with the previous nine months.
Document Solutions Group
Sales revenue in the nine months increased by 6,933 million yen, or 2.6 percent, to 273,835 million yen, compared with 266,902 million yen in the previous nine months. Kyocera says this was due primarily to an increase in sales volume of copier/MFPs in Japan and overseas, as well as contributions from mergers and acquisitions.
Business profit in the nine months increased by 993 million yen, or 3.4 percent, to 30,081 million yen compared with 29,088 million yen in the previous nine months, due to sales growth and cost reductions. The business profit ratio for the nine months was 11.0 percent, which was almost level with the 10.9 percent recorded for the previous nine months.
Due to lower expected sales overall, Kyocera lowered its forecast for its fiscal year that will end on March 31, 2019, and is now forecasting business profit of 90 billion yen, versus the 95 billion yen it posted in its previous forecast, but up 7.6 percent versus its previous fiscal year’s profits of 79 billion yen.