JAPAN NEWS: Firms see better FY06 despite late-year problems

April 17, 2007 – A quick scan of earnings outlooks in Japan shows optimism, despite some bumpy roads in the past couple of months ending the fiscal year, according to several local papers.

Elpida expects a 53 million yen group net profit for the fiscal year ended in March, far above its 4.71B yen earnings a year ago, thanks to better memory prices and demand. The firm forecasts group sales of 490 billion yen, vs 241.55 billion yen last year.

Shin-Etsu Chemical expects a 34% increase in group net profit to ~154 billion yen for its fiscal year — about 4 billion yen more than projected and a record 12th consecutive profitable year — on 15% higher sales of 1.3 trillion yen. Operating profit is seen rising 30% to 241 billion yen, with pretax profits up 33% to about 247 billion yen. Shipments were strong for both 300mm and 200mm wafers, and photoresist sales also boosted the bottom line. A 26 billion yen charge, attributed to shorter depreciation period for wafer fab tools from five years to three, is likely to be offset through the higher sales.

Looking ahead, Toshiba is targeting 9.5 trillion yen in consolidated sales through the year ending March 2011, up from 7 trillion yen in fiscal 2006, and has hiked its anticipated operating profit to 480 billion yen from just 250 billion yen in the just-completed fiscal year, noted the Nikkei Financial Daily. Total capex for the three-year business plan is set at 1.75 trillion yen, about 20% higher (300 billion yen) than the previous three-year period, with just over two-thirds of that amount allotted to NAND flash memory “and other key areas.” Free cash flow during fiscal 2010 is expected to be roughly 280 billion yen, a wide swing from a 220 billion yen deficit in the just-completed fiscal year, which included acquisition costs of US firm Westinghouse Electric Co.


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