DENSO Announces First-half Financial Results

KARIYA, Japan, Oct. 30 /PRNewswire/ -- DENSO Corporation today announced global financial results for the first-half ending September 30, 2009:

• Consolidated net sales totaled 1,302.2 billion yen (US$14.4 billion), a 31.2 percent decrease from the previous year.
• Consolidated operating income totaled 9.8 billion yen (US$108.2 million), a 91.5 percent decrease from the previous year.
• Consolidated net income totaled 5.1 billion yen (US$56.0 million), a 91.4 percent decrease from the previous year.
  

"The worldwide decline in car production has led to the decrease in sales and income, but our efforts in reducing fixed costs has helped our income to return to the black," said Nobuaki Katoh, president and CEO of DENSO Corporation.

In Japan, in addition to a decrease in domestic car production and product exports mainly to North America and Europe, currency exchange losses led to a decrease in sales to 892.2 billion yen (US$9.9 billion), a 30.3 percent decrease from the previous year. Despite cost reduction efforts, the lower production volumes and currency exchange losses led to an operating loss of 20.2 billion yen (US$224.4 million), a decrease of 64.9 billion yen (US$719.6 million) from the previous year's operating income.

In North, Central and South America, a decrease in sales mainly to Toyota, General Motors, Chrysler, and other Japanese auto manufacturers - resulting from cuts in car production - led to a decrease in sales to 235.8 billion yen (US$2.6 billion), a 33.9 percent decrease from last year. Despite the lower production volumes, a reduction in fixed cost led to a slight operating income. The operating income was 0.9 billion yen (US$10.0 million), a decrease of 14.0 billion yen (US$155.4 million) from the previous year's operating income.

In Europe, despite some countries car scrappage incentive schemes, lower car production for Japanese auto manufacturers led to a decrease in sales to 194.1 billion yen (US$2.2 billion), a 33.9 percent decrease from last year. Reductions in fixed costs led to operating income of 2.5 billion yen (US$27.7 million), a decrease of 6.6 billion yen (US$73.0 million) from the previous year's operating income.

In Asia and Oceania, a decrease in car production volumes in ASEAN countries resulted in a decrease in sales to 222.7 billion yen (US$2.5 billion), a 25.9 percent decrease from the previous year. The lower production volumes led to an operating income of 27.7 billion yen (US$306.9 million), a 36.2 percent decrease from the previous year.

"With steady results from the reduction of fixed costs, which is one of our primary activities to improve earnings, we have made an upward revision to our full-year forecasts for the fiscal year ending March 31, 2010, with incomes returning to the black," said Katoh. "On the other hand, the future business environment from the next fiscal year on is unclear as incentive programs come to an end at each country and with expected progress of higher yen, and we will continue to work to improve earnings."

    Forecast for Fiscal Year Ending March 31, 2010

                      FY Forecast          FY Forecast          Changes from
                      (Original)            (Revised)            Previous FY


     Net Sales   2,720.0 billion yen   2,800.0 billion yen  -342.7 billion yen
                  [US$30.2 billion]     [US$31.0 billion]    (- 10.9 percent)
     Operating
      income
      (loss)    (40.0) billion yen      36.0 billion yen     +73.3 billion yen
                [US($443.4) million]   [US$399.1 million]           (-)

     Income
      (loss)
      before
      income
      taxes and
      minority
      interests  (38.0) billion yen     42.0 billion yen    +141.3 billion yen
                 [US($421.2) million]  [US$465.6 million]           (-)

     Net income
      (loss)    (19.0) billion yen      20.0 billion yen    +104.1 billion yen
               [US($210.6) million]    [US$221.7 million]           (-)

DENSO Corporation, headquartered in Kariya, Aichi prefecture, Japan, is a leading global supplier of advanced technology, systems and components. Worldwide, the company employs 120,000 people in 33 countries and regions, including Japan. DENSO common stock is traded on the Tokyo, Osaka and Nagoya stock exchanges in Japan. For more information, go to www.globaldenso.com.

(Notes)
U.S. dollar amounts have been translated, for convenience only, at the rate of 90.21 yen = US$1, the approximate exchange rate prevailing in the Tokyo Foreign Exchange Market on September 30, 2009. Billion is used in the American sense of one thousand million.