Latest Update : Nov.29, 2017
Overview for the 1H of FY 3/2018 (From April 1, 2017 to September 30, 2017)
The Japanese economy continued on a gradual upward trajectory during the first half of the fiscal year (April 1, 2017 to September 30, 2017) as the growth in compensation of employees along with other factors boosted consumer spending and corporate earnings picked up. The U.S. economy remained healthy thanks to the robust job market as well as strong domestic and international demand despite a temporary downturn in consumer spending and corporate production in the wake of massive hurricanes that hit the country from late August through early September. The European economy remained upbeat as the growth in compensation of employees drove consumer spending up and corporate capital expenditures gradually recovered in step with increasing eurozone exports. In Asia, the Chinese economy slowly lost steam due primarily to reduced investments in infrastructure and real estate development despite growing consumer spending.
Working against this backdrop, Our Group has been concentrating on cutting costs, creating high-value-added products, developing new technologies, and enhancing its marketing approach to boost profitability further.
As a result, net sales increased 153,894 million yen (55.9%) year on year to total 429,027 million yen for a first half record high. Operating income was up 23,357 million yen (125.6%) year on year to total 41,951 million yen, and ordinary income rose 23,247 million yen (122.9%) year on year to reach 42,162 million yen. Income attributable to owners of the parent increased 21,531 million yen (168.9%) year on year to hit 34,276 million yen. Operating income, ordinary income, and income attributable to owners of the parent were the highest ever for any first half.
Performance by Segment for the 1H of FY 3/2018 (From April 1, 2017 to September 30, 2017)
Machined Components Business Segment
Products in our Machined components segment include our mainstay product, ball bearings, mechanical components, such as rod-end bearings used primarily in aircraft and hard disk drive (HDD) pivot assemblies, etc. as well as fasteners for automobiles and aircraft. Sales of ball bearings to external customers hit a record monthly high in September as demand for products designed for automobile fuel-saving and safety devices as well as fan motors soared. Although the volume of pivot assembly sales declined due to the shrinking HDD market, sales revenues were up due to currency fluctuations as well as other factors. Rod-end bearing sales increased due to foreign currency effects as well as other factors despite declining production of large models in the civil aircraft market.
As a result, net sales for the first six-month period were up 5,907 million yen (7.7%) year on year to total 82,374 million yen while operating income increased 1,698 million yen (8.7%) year on year to total 21,223 million yen.
Electronic Devices and Components Business
The core products of our Electronic devices and components segment include electronic devices (LED backlights for LCDs, sensing devices (measuring components), etc.), HDD spindle motors, stepping motors, DC motors, air movers (fan motors), precision motors, and special devices. Demand for our LED backlights for LCDs that offer a technological advantage in thin smartphones continued to soar. Sales of stepping motors and other motors grew mainly in the automobile market.
As a result, net sales rose 39,099 million yen (19.7%) year on year to total 237,453 million yen, and operating income increased 11,408 million yen (166.5%) year on year to total 18,260 million yen.
The main products in the MITSUMI business segment are semiconductor devices, optical devices, mechanical components, high frequency components and power supply components. Camera actuators, game console mechanism components, switches, products for smartphones such as protection IC, antennas, communication modules and connectors all performed well.
In the end, net sales for the first six-month period came to 108,834 million yen and operating income totaled 10,351 million yen.
Other Business Segment
Net sales in our Other business segment, which includes machines produced in-house, were up 54 million yen (17.3%) year on year to total 365 million yen. Operating losses increased 132 million yen year on year to total 185 million yen.
In addition to the figures noted above, 7,699 million yen in corporate expenses, etc. not belonging to any particular segment is indicated as adjustments. Adjustments for the same period last year totaled 7,730 million yen.
Analysis of Financial Position for the 1H of FY 3/2018 (From April 1, 2017 to September 30, 2017)
Assets, Liabilities, and Net Assets
Our Group sees "strengthening its financial position" as a top priority and is taking various steps, such as efficient asset management, controlling capital investments, and reducing interest-bearing debt.
Total assets at the end of the second quarter amounted to 743,146 million yen, up 99,834 million yen compared to the end of the previous fiscal year. The main reasons for this uptick include increases in notes and accounts receivable as well as inventories. Total liabilities at the end of the second quarter amounted to 379,688 million yen, up 62,595 million yen compared to the end of the previous fiscal year. This jump was primarily due to an increase in notes and accounts payable. Net assets amounted to 363,457 million yen, resulting in an equity ratio of 47.9%, down 2.1 percentage points from what it was at the end of the previous fiscal year.
Condition of Cash Flows
The balance of cash and cash equivalents at the end of the second quarter was 80,309 million yen, up 1,476 million yen from what it was at the end of the previous fiscal year. Furthermore, this was up 42,080 million yen compared to the end of the same period of the previous fiscal year because there was an increase of 32,472 million yen arising from the consolidation of MITSUMI ELECTRIC CO., LTD. and its subsidiaries.
Cash flows during the first fiscal half and relevant factors are as follows:
Net cash provided by operating activities amounted to 35,250 million yen (an inflow of 25,167 million yen in the same period of the previous year). This is due to increases and decreases in income before income taxes, notes and accounts payable, inventories, as well as notes and accounts receivable, etc. Net cash used for investment activities totaled 23,777 million yen (an outflow of 25,314 million yen in the same period of the previous year). This is mainly due to the purchase of tangible fixed assets and purchase of investments in subsidiaries resulting in change in scope of consolidation. Net cash used in financing activities amounted to 11,826 million yen (an inflow of 12,409 million yen in the same period of the previous year). This is due to purchase of treasury stock, etc.
The content of this page is based on information included in the "Brief Report for Second Quarter of Fiscal Year Ending March 2018 (From April 1, 2017 to September 30, 2017)" announced on November 8, 2017.