July 30, 2010,13:52 +0900(JST) Turning the first corner of FY2010
On July 29, we announced the company’s business results for the first quarter of FY2010. We made a relatively good start, registering 487.8 billion yen in sales (an increase of 115.7 billion yen from FY 2009’s same period, or 31%); 19.8 billion yen in operating income (up 34.5 billion yen year-on-year); 26.1 billion yen in ordinary income (up 40.1 billion yen year-on-year); and 19.2 billion yen in net profit (up 29.5 billion yen year-on-year).
Thanks to economic growth in China, India and other newly emerging economies, worldwide demand is recovering, particularly in automobile-related sectors, and our sales have returned to about 80% of the figures of the first quarter FY 2008, i.e., just before the Lehman shock.
Twelve months ago, we had plunged into negative figures due to drastic demand shrinkage under the impact of the worldwide recession. We have since made group-wide efforts at "keeping our organizations appropriate to our abilities and reconstructing our cost system", while promoting "expanded and deeper internal solidification", successfully achieving a lean corporate constitution and a profit-making mechanism.
Currently, some market watchers are embracing an optimistic view of gradual and sustained recovery; as a business manager, however, I cannot let my guard down. In view of the sluggish demand in Japan, the continually strong yen and the general concern for economic slowdown from around the end of summer, there’s really no telling what the future holds.
The merging of regional markets into one global market is intensifying global-scale competition. In this situation, as a top manufacturer in its field the Sumitomo Electric Group has vigorously pursued technological development, made globalized responses and taken some aggressive actions, including M&A, but we can’t be content with such moves only. So I continuously appeal to our group people regarding the need to build a mechanism that will enable us to overcome any anticipated challenges, and to create an even leaner and muscular constitution by carefully but quickly tackling SEQCDD problems.
Ben Bernanke, Chairman of the US Federal Reserve, said "unusually uncertain" when referring to the economic situation while emphasizing lack of transparency. Nevertheless, as a group we are determined to do our very best to realize our annual numerical targets announced earlier (2 trillion yen in sales, 100 billion yen in operating income, 120 billion yen in ordinary income and 60 billion yen in annual net profit). On our way to achieving these goals, your continued support will be greatly appreciated.