May 29, 2008,13:32 +0900(JST) Business Results
On May 9, Sumitomo Electric posted its business results for the fiscal year ended March 31, 2008.
Our performance is as follows: As a result of efforts to reinforce our profit structure to meet the intensifying domestic and global competition and the changing needs of the market, sales reached ￥2540.9 billion (up 6.6% year on year), operating profit was ￥149 billion (up 15.7% year on year), ordinary profit was ￥169.6 billion (up 16.7% year on year) and net profit was ￥87.8 billion (up 15.5% year on year). This meant we had increased income and profits for five consecutive years and we achieved record high results this year.
Last year was the final year of reckoning for Vision 2007. Also, I requested an all-out effort from all divisions so that we may spur ourselves into readiness for the start of Vision 2012 this year. Thanks to all your hard work, we were able to make such a great achievement, clearing the first 5-year targets by an ample margin. I would like to thank everybody for this.
Vision 2007 was created by Chairman Mr. Norio Okayama. The Sumitomo Electric Group had worked full steam to achieve its goals. There were some difficult tasks, such as restructuring, but I am convinced that we could accomplish it only because of the sincere effort made by all Group members.
As for the annual business forecast for this year, there are shadows across the world economy. Recession is feared in the USA as the sub-prime loan problem becomes protracted. In Europe and Asia, although demand from emerging economies is to be a strong underlying driving force, fears are of the adverse impact of the weak US economy albeit limited in scope.
Turning our eye to the Japanese economy, the slowdown is expected to worsen due to the strong yen and the steep rise in raw material prices. The environment surrounding corporate profits appears to be very unpredictable.
The forecasts for the different divisions of our company this year are looking increasingly tough. Although there is no cause for pessimism, there is no doubt that this will be a difficult year for the Group to steer the right course.
I intend to draw up a variety of strategies and put them into action. Nevertheless, we announced our forecast as: sales of ￥2550 billion, operating profit of ￥130 billion, ordinary profit of ￥150 billion and net profit of ￥78 billion.
These forecast figures mean that sales will peg level, and operating profit, ordinary profit and net profit will see a year-on-year drop. I had made an explanation at the time of the business results announcement, saying that “if we exclude special factors pertaining to this year such as the strong yen, accounting difference in pensions and change in the depreciation system, the actual figures would be those of increased income and increased profit.”
Despite this explanation, I truly regret having to announce targets that are not in line with the increased-income increased-profit basis on which our company is expected to operate. These targets though are the minimum hurdles we must clear so that we can be known as a “Glorious Excellent Company” to others and to ourselves. Thus, in the first year of Vision 2012, I hope that all Group members will concert efforts and throw themselves totally into the achievement of the business performance targets that we set.