FY 2015 THIRD QUARTER (CUMULATIVE) CONSOLIDATED FINANCIAL RESULTS
(April 1, 2015 to December 31, 2015)
Company Name : SANKEN ELECTRIC CO., LTD.
Code NO :
6707
Headquarters : 3-6-3 Kitano, Niiza-shi, Saitama 352-8666, Japan
URL : http://www.sanken-ele.co.jp/
Contact : Finance and Investor Relations Division Tel. 81-48-487-6121
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FINANCIAL RESULTS FOR THE NINE MONTHS ENDED DECEMBER 31, 2015
Net sales
(millions of yen)
Operating income
(millions of yen)
Ordinary income
(millions of yen)
Profit attributable to owners of parent
(millions of yen)
Nine months ended Dec 31,2015
Nine months ended Dec 31,2014
113,675 (-1.9%)
115,880 (11.7%)
3,865 (-46.1%)
7,174 (79.2%)
2,231 (-68.3%)
7,031 (100.7%)
-428 -
4,932 (32.6%)
Consolidated Results of Operations
Note1: Comprehensive income: △869 million yen ( －%) for nine months ended Dec 31, 2015
/ 12,700 million yen ( 51 3%) for nine months ended Dec 31, 2014
Note2: Indication of percentages shows the ratio of increase or decrease from the third quarter of the previous fiscal year
Net income per share
(yen)
Diluted net income per share (yen)
Nine months ended Dec 31,2015
Nine months ended Dec 31,2014
-3.54
40.68
－
－
Consolidated Financial Position (Millions of yen)
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DIVIDEND INFORMATION
Dividend per share
First quarter
Second quarter
Third quarter
Fiscal-year-end
Annual
Fiscal year 2014
Fiscal year 2015
-
-
3.00yen
3.50yen
-
-
3.50yen
6.50yen
Fiscal year 2015(forecast)
3.50yen
7.00yen
Note1: Revision to recently disclosed dividend forecast: No
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FISCAL YEAR 2015 CONSOLIDATED FINANCIAL FORECAST (April 1, 2015 to March 31, 2016) (Millions of Yen)
Net sales
(percentage change from
the previous year)
Operating income
(percentage change from
the previous year)
Ordinary income
(percentage change from
the previous year)
Profit attributable to owners of parent
(percentage change from the previous year)
Net income per share
Full Year
157,800 (-1 8%)
6,000 (-46 4%)
3,800 (-63 2%)
200 (-97 5%)
1.65yen
Note: Revision to recently disclosed financial forecast: Yes
- OTHER
Changes in significant subsidiaries during the nine months ended December 31, 2015 (changes to specified subsidiaries accompanying the change in scope of consolidation): No
Application of particular accounting method for quarterly consolidated financial statements: Yes
Changes in accounting policies, changes in accounting estimates, restatement of revisions
Changes in accounting policies according to revision of accounting standards, etc : Yes
Changes in accounting policies due to reasons other than above : Yes
Changes in accounting estimates : No
Restatement of revisions : No
Dec./2015: 125,490,302
Mar./2015: 125,490,302
Dec./2015: 4,272,336
Mar./2015: 4,253,173
Apr./2015-Dec./2015 121,228,627
Apr./2014-Dec./2014 121,256,878
Number of shares outstanding (common share)
Number of shares outstanding at the end of the period (including treasury stock)
Number of treasury stocks at the end of the period
Average number of shares outstanding during nine months ended December 31
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QUALITATIVE INFORMATION ABOUT CONSOLIDATED OPERATING RESULTS
The global economy remained on a moderate recovery trend as a whole during the nine months ended December 31, 2015. The US economy continued to expand on the back of increased job opportunities; the European economy also stayed on a moderate recovery trend with help from steady personal consumption; the Chinese economy progressed favorably in spite of a remarkable slowdown of growth. A host of concerns arose, however, from the second half of the nine months ended December 31, 2015 onward, such as the fund movements resulting from the interest rate hike in the US, the effects of declining crude oil prices on the economies of resource-rich countries, and the further rising geopolitical risk in Europe and the Middle East. These factors made the outlook for the global economy more opaque. The Japanese economy was maintained overall on a moderate recovery trend, whilst growth stalled somewhat because consumer sentiment stood at a standstill and exports to China and other countries lacked strength.
In such an economic climate, the demand for the Company's products fell below the planned targets as a whole in markets for automotive and white goods and remained sluggish in markets for office equipment and industrial machinery due to a downturn phase in the global market cycles for semiconductors.
In the nine months ended December 31, 2015, chemicals(hydrogen peroxide) purchased and used by the Company for processing semiconductor wafers in the semiconductor devices segment had quality problems that prevented the affected wafers from exhibiting the prescribed performance. We had no choice but to assume disposing of the defective wafers and record extraordinary losses of
¥1,103 million as a provision for inventories in the consolidated financial statements for the third quarter of the current fiscal year. In addition, a portion of sales shifted to the previous fiscal year because some customers delivered ahead of schedule to avoid risks of our new ERP system activated in May 2015. Global business cycles in semiconductor industries as a whole entered a downturn phase and the Chinese economy remained in the same trend of slowdown in growth. As a result, sales of semiconductor devices fell below the planned targets. In spite of the weaker yen, net sales increased just slightly as compared to the same period in the previous year.
In the power modules segment, though net sales progressed steadily as compared to the same period in the previous year thanks to the weaker yen and other factors, we failed to attain actual improvements in profitability due to delays in cost improvement. In the power systems segment, sales of products in the new energy market were sluggish and were not at levels high enough to counterbalance the sales decreases resulting from contracted capital investments for mobile phone base-stations.
As a result, net sales during the nine months ended December 31, 2015 were ¥113,675 million, a decrease of ¥2,204 million (1.9%) as compared to the same period in the previous year. For income, we posted a provision for the expected disposal of the previously mentioned semiconductor wafers and recorded decreased income in association with decreased net sales. We therefore recorded operating income of ¥3,865 million, a decrease of ¥3,309 million (46.1%) as compared to the same period in the previous year, and ordinary income of ¥2,231 million, a decrease of ¥4,799 million (68.3%). We recorded loss attributable to owners of parent of ¥428 million (profit attributable to owners of parent of ¥4,932 million in the same period in the previous fiscal year).
Overview of business by segment is as follows.
In the semiconductor devices segment, sales of automotive products increased, as compared to the same period in the previous year, mainly due to higher sales overall boosted by the weaker yen. Meanwhile, sales of products for white goods such as air conditioners and refrigerators remained unchanged and sales of products for office equipment, industrial machinery and TVs and audio products decreased. As a result, consolidated net sales of the segment were ¥92,015 million, a slight increase of ¥245 million (0.3%) as compared to the same period in the previous year. For income, consolidated operating income was ¥6,134 million, a decrease of ¥2,551 million
(29.4%) as compared to the same period in the previous year, due to factors such as sluggish sales, the posting of a provision for the expected disposal of wafers, the increase in expenses related to the new Sanken ERP system and the construction of the Allegro Plant in Thailand.
For the power modules segment, sales of products for printers for office and industrial machinery stayed on the same level as the previous year, while sales of adapters mainly for TVs expanded. As a result, consolidated net sales from this segment were ¥12,297 million, an increase of ¥1,055 million (9.4%) as compared to the same period in the previous year. Meanwhile, for income we recorded consolidated operating loss of ¥694 million (consolidated operating loss of ¥534 million in the same period in the previous year) mainly due to changes in the product mix.
Sales for the power systems segment remained sluggish. Due to contracted capital investments for telecommunication facilities mainly for mobile phones, sales of products aimed for the same market declined. Moreover, sales of products aimed for the new energy sector, which was expected to boost sales, were sluggish. As a result of the above, consolidated net sales from this segment were ¥9,363 million, a decrease of ¥3,504 million (27.2%) as compared to the same period in the previous year. For income, we recorded consolidated operating income of ¥338 million, a decrease of ¥378 million (52.8%) as compared to the same period in the previous year.
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QUALITATIVE INFORMATION ABOUT CONSOLIDATED FINANCIAL POSITION
Total assets as of the end of December 31, 2015 were ¥192,429 million, a decrease of ¥838 million from the end of the previous consolidated fiscal year. This was mainly due to an increase in inventories of ¥5,022 million, and a decrease in notes and accounts receivable-trade of ¥6,702 million.
Total Liabilities were ¥131,141 million, an increase of ¥896 million from the end of the previous consolidated fiscal year. This was mainly due to an increase in bonds payable of ¥10,900 million and a decrease in notes and accounts payable-trade of ¥4,244 million and in commercial papers of ¥2,000 million.
Net Assets were ¥61,287 million, a decrease of ¥1,734 million from the end of the previous consolidated fiscal year. This was mainly due to a decrease in retained earnings of ¥1,277 million and in foreign currency traslation adjustment of ¥362 million.
- QUALITATIVE INFORMATION ABOUT CONSOLIDATED FINANCIAL FORECAST
Total assets | Net assets | Shareholders' equity ratio | |
As of December 31, 2015 As of March 31, 2015 | 192,429 193,267 | 61,287 63,021 | 31.6% 32.4% |
* The above description about future matters including financial forecast is based upon information available as of the present time and assumptions we considered valid Due to various factors, our actual performance could greatly differ from the forecast For assumptions and notes regarding the forecasts, refer to "Qualitative Information concerning the Forecast of Consolidated Business Results "
1. QUALITATIVE INFORMATION ABOUT CONSOLIDATED BUSINESS RESULTS FOR THE NINE MONTHS ENDED DECEMBER 31, 2015We expect that the global economy will overall remain on a gradual recovery trend, though some degree of uncertainty will persist. The US economy is expected to continue to grow, but is riddled with uncertain factors such as the effects of declining crude oil prices on domestic industries. Although the European economy is also expected to maintain a moderate recovery, concerns are raised due to factors such as the slowing rate of improvement in economic activity. Moreover, growth of the Chinese economy is projected to be unstable in the face of risks that could further worsen economic performance. In the Japanese economy, the future outlook will be further uncredictable, mainly by the risk that the slowdowns in the emerging economies such as China will suppress economic recovery. In such an economic climate, it is difficult to be optimistic about the demand for the Company's products, which is affected by various factors such as the persistent downturn phase in global market cycles in the semiconductor industries as a whole and the continual slowdown in growth in the Chinese economy. Against such an economic backdrop, and judging from the Company's financial results for the third quarter of the current fiscal year including the abovementioned disposal of semiconductor wafers and expected changes in net sales for the fourth quarter due to partial time extensions of deliveries to customers because of the above-stated chemicals issue, amendments will be made as follows concerning the released forecast of the consolidated financial results of the current fiscal year.
[Forecast of Consolidated Business Results for the Fiscal Year ending March 31, 2016](Millions of Yen)
Forecast of the consolidated business results of the full-year ending March 31, 2016 | Increase or decrease as compared to the same period in the previous year | Forecast of the consolidated results of the full-year announced in November 2015 | |
Net Sales | 157,800 | -1.8% | 162,000 |
Operating Income | 6,000 | -46.4% | 8,000 |
Ordinary Income | 3,800 | -63.2% | 6,000 |
Profit attributable to owners of parent | 200 | -97.5% | 2,500 |
As mentioned above, though the Company will make amendments to the full-year consolidated financial forecast, the Company shall continuously strive to achieve the revised targets of the group plan for fiscal 2015, aiming to further increase its earnings. To accomplish this, the Company shall put an effort into strengthening sales of existing products which utilize multiple channels, and expand sales by means of new uses and products which suit the needs of primary end markets, in the strategic markets related to the environmental friendly, energy saving, and green energy. By doing the above, the Company
works to expand its business. At the same time, it shall aim to greatly improve production cost by methods such as developing
new material suppliers, promoting streamlined and automated production procedures, and facilitating the use of external resources while strongly implementing "Break-even Point Management" for instance further control of fixed expenses.