MEL.L Regulatory News (MEL)

30 Jul 2007 07:44

Mitsubishi Electric Corporation30 July 2007 FOR IMMEDIATE RELEASE No. 2414 Investor Relations Inquiries: Media Contact:Yasumitsu Kugenuma Travis WoodwardCorporate Finance Division Public Relations DivisionMitsubishi Electric Corporation Mitsubishi Electric CorporationTel: +81-3-3218-2391 Tel: +81-3-3218-3380Cad.Irg@rk.MitsubishiElectric.co.jp prd.gnews@nk.MitsubishiElectric.co.jp http://global.mitsubishielectric.com/news/ MITSUBISHI ELECTRIC ANNOUNCES CONSOLIDATED FINANCIAL RESULTS FOR THE FIRST QUARTER OF FISCAL 2008 Tokyo, July 30, 2007 - Mitsubishi Electric Corporation (President and CEO:Setsuhiro Shimomura) announced today its financial results for the firstquarter ending June 30, 2007, of the current fiscal year ending March 31, 2008(fiscal 2008). Consolidated Financial Results Net sales: 872.7 billion yen (6% increase from the same quarter last year)Operating income: 65.9 billion yen (63% increase from the same quarter last year)Income before income taxes: 67.0 billion yen (65% increase from the same quarter last year)Net income: 46.5 billion yen (87% increase from the same quarter last year) Management conditions during the first quarter of fiscal 2008 saw a continuedtrend of underlying strength in the global economy. As the yen weakened againstother major currencies, the Japanese economy as well experienced a general trendof underlying strength despite a sense of stagnation in demand for capitalinvestment. Under these circumstances, first quarter consolidated net sales grew 6% comparedto the same period of the previous fiscal year to 872.7 billion yen due toincreased revenue from the Energy and Electric Systems, Industrial AutomationSystems, Electronic Devices, and Home Appliances segments. Consolidated operating income increased 63% from the same period of the previousfiscal year to 65.9 billion yen due to increased profit from the Energy andElectric Systems, Industrial Automation Systems, and Home Appliances segments. Consolidated Financial Results by Business Segment Energy and Electric Systems Total sales: 195.4 billion yen (17% increase from the same quarter last year)Operating income: 13.3 billion yen (11.7 billion yen increase from the same quarter last year) The social infrastructure systems business saw increases in both orders andsales compared to the same period of the previous fiscal year, mainly due toexpansion of our electric equipment for domestic rolling stock business,electric transmission and distribution related business, and power generationbusiness. The building system business experienced a decrease in orders comparedto the same period of the previous fiscal year due to a decrease in largedomestic installation orders in elevators and escalators, however salesincreased due to large installation orders in China and the Middle East, etc. As a result, total sales for this segment increased 17% from the same period ofthe previous fiscal year. Operating income increased by 11.7 billion yencompared to the same period of the previous fiscal year due to increased sales,etc. Industrial Automation Systems Total sales: 239.7 billion yen (4% increase from the same quarter last year)Operating income: 37.8 billion yen (4.8 billion yen increase from the same quarter last year) The factory automation systems business saw decreases in both orders and salescompared to the same period of the previous fiscal year due to a decrease inflat panel display related investments mainly in Korea and Taiwan as well as asluggish recovery of automobile related investment. The automotive equipment business saw an increase in both orders and salescompared to the same period of the previous fiscal year supported by buoyantglobal production of Japanese automobile manufacturers. As a result, total salesfor this segment showed an increase of 4% compared to the same period of theprevious fiscal year. Operating income increased by 4.8 billion yen compared tothe same period of the previous fiscal year due to increases in sales, etc. Information and Communication Systems Total sales: 120.3 billion yen (14% decrease from the same quarter last year)Operating income: 0.0 billion yen (5.1 billion yen decrease from the same quarter last year) The telecommunications equipment business saw decreases in both orders and salescompared to the same period of the previous fiscal year, due to decreases inmobile handsets, etc. The information systems and service business saw a decrease in sales compared tothe same period of the previous fiscal year, mainly due to decreases in thecomputer platform business, etc. The electronic system business saw increases in both orders and sales comparedto the same period of the previous fiscal year due to increases in the spacesystem business. As a result, total sales for this segment showed a decrease of 14% compared tothe same period of the previous fiscal year. Operating income decreased by 5.1billion yen compared to the same period of the previous fiscal year due todecreases in sales, etc. Electronic Devices Total sales: 47.5 billion yen (2% increase from the same quarter last year)Operating income: 2.4 billion yen (1.1 billion yen decrease from the same quarter last year) The semiconductor business saw an increase in both orders and sales from thesame period of the previous fiscal year due to increases in power modules forconsumer use mainly in air conditioners and industrial use as well as poweramplifiers for mobile handsets, etc. The liquid crystal business saw decreases in both orders and sales from the sameperiod of the previous fiscal year. Although sales of medium sized products forindustrial use were on par with the same period of the previous fiscal year,there was a decrease in small sized consumer use products for mobile handsets,etc. As a result, total sales for the segment increased by 2% compared to the sameperiod of the previous fiscal year. Operating income decreased by 1.1 billionyen compared to the same period of the previous fiscal year due to liquidcrystal price erosion, etc. Home Appliances Total sales: 238.0 billion yen (15% increase from the same quarter last year)Operating income: 18.5 billion yen (15.5 billion yen increase from the same quarter last year) The home appliance business saw an increase in sales of 15% compared to the sameperiod of the previous fiscal year due to increased sales of electric hot watersupply systems and other appliances for use in all-electric-powered homes forthe domestic market as well as air conditioners and solar power generationsystems for the overseas market. Operating income increased by 15.5 billion yenfrom the same period of the previous fiscal year due to increases in sales, etc. Others Total sales: 150.0 billion yen (8% increase from the same quarter last year)Operating income: 2.3 billion yen (0.2 billion yen decrease from the same quarter last year) Sales increased 8% compared to the same period of the previous fiscal year inaffiliated companies mainly in material procurement and logistics. Operatingincome decreased by 0.2 billion yen from the same period of the previous fiscalyear. Financial Standing The company's total assets for this fiscal quarter decreased from the end of theprevious fiscal year by 23.0 billion yen to 3,429.2 billion yen. Inventory sawan increase of 98.1 billion yen mainly due to work-in-process from progress inreceived orders for construction. Trade receivables decreased by 108.7 billionyen as a result of collection, etc, while cash and cash equivalents decreased by13.6 billion yen. The balance of outstanding debts and corporate bonds fell by 14.6 billion yenfrom the balance as of the end of the previous fiscal year to 626.3 billion yen,reducing the ratio of interest bearing debt to total assets to 18.3% (animprovement of 0.3% compared to the end of the previous fiscal year). Accountspayable decreased by 50.3 billion yen, and retirement and severance benefitsdecreased by 16.6 billion yen due to increases in pension assets, etc. Shareholders' equity increased by 53.2 billion yen compared to the previousfiscal year to 1,112.4 billion yen. This was due to increase from 46.5 billionyen capitalization from total consolidated net income, and accumulated othercomprehensive income increased by 19.5 billion yen amidst weakening of the yen,etc, despite decreases from dividend payments of 12.8 billion yen. Shareholders'equity ratio improved 1.7 % compared to the end of the previous fiscal year to32.4%. Operating cash flow for this quarter decreased 22.4 billion yen compared to theprevious fiscal year to 35.4 billion yen (cash in) due to an increase innet profit for this financial period, despite increases in inventory as well astrade receivables to be collected from the next fiscal period. Investment cashflow decreased by 0.4 billion yen compared to previous fiscal year to 20.5billion yen (cash out). As a result, free cash flow totaled 14.8 billion yen.Financial cash flow was 32.9 billion yen (cash out) due to dividend payments andrepayment of loans. Forecast for the first half of Fiscal 2008 (ending September 30,2007) With the Home Appliances segment's buoyancy in air conditioners overseas,expansions in Energy and Electric Systems, expected increased sales due to theweakness of the yen, we will modify the consolidated and non-consolidatedearnings forecast for the first half of Fiscal 2008 from the yearly resultsannouncement on April 27, 2007 as written below. There are no changes from theearnings forecast for the fiscal year. First Half of Fiscal 2008 Consolidated Earnings Forecast (previous forecast) Net sales: 1,900 billion yen (1,850 billion yen) (6% increase from the same period last year)Operating income: 120 billion yen (85 billion yen) (28% increase from the same period last year)Income before income taxes: 115 billion yen (80 billion yen) (39% increase from the same period last year)Net income: 80 billion yen (57 billion yen) (42% increase from the same period last year) First Half of Fiscal 2008 Non-consolidated Earnings Forecast (previous forecast) Net sales: 1,140 billion yen (1,110 billion yen) (5% increase from the same period last year)Operating income: 65 billion yen (45 billion yen) (15% increase from the same period last year)Ordinary Profit: 70 billion yen (45 billion yen) (10% increase from the same period last year)Net income: 51 billion yen (34 billion yen) (65% increase from the same period last year) CONSOLIDATED FINANCIAL RESULTS SUMMARY (In billions of yen except where noted) FY'08 Ql (A) FY '07 Ql (B) (April 1,2007- (April 1,2006- A/B June 30, 2007) June 30, 2006) (%) Net sales 872.7 821.5 106 Operating income 65.9 40.5 163 Income before 67.0 40.6 165income taxes Net income 46.5 24.8 187 Basic net income 21.68 yen 11.59 yen 187per share Note: 1) Consolidated financial charts made according to U.S. GAAP. 2) Company has 150 consolidated subsidiaries. 3) This report is unaudited. CONSOLIDATED PROFIT AND LOSS STATEMENT (In millions of yen) FY'08 Ql FY '07 Ql (April 1,2007- (April 1,2006- A/B June 30, 2007) June 30, 2006) (A) % of (B) % of A/B total total (%) Net sales 872,723 100.0 821,530 100.0 51,193 106 Cost of sales 618,391 70.9 600,018 73.0 18,373 103 Selling, general andadministrative expenses 188,360 21.5 180,918 22.1 7,442 104 Operating income 65,972 7.6 40,594 4.9 25,378 163 Other income 10,456 1.2 11,429 1.4 (973) 91 Interest and dividends 4,620 0.5 3,059 0.4 1,561 151 Other 5,836 0.7 8,370 1.0 (2,534) 70 Other expenses 9,329 1.1 11,337 1.3 (2,008) 82 Interest 2,521 0.3 2,488 0.3 33 101 Other 6,808 0.8 8,849 1.0 (2,041) 77 Income before income taxes 67,099 7.7 40,686 5.0 26,413 165 Income taxes 24,680 2.9 20,068 2.5 4,612 123 Equity in earnings of affiliated companies 4,124 0.5 4,265 0.5 (141) 97 Net income 46,543 5.3 24,883 3.0 21,660 187 CONSOLIDATED BALANCE SHEET (In millions of yen) FY'08 Ql (A) FY'07 Ql (B) (ending June (ending March A/B 30, 2007) 31, 2007) (Assets)Current assets 2,032,635 2,050,500 (17,865)Cash and cash equivalents 328,986 342,640 (13,654)Short-term investments 15,280 16,258 (978)Trade receivables 782,552 891,271 (108,719)Inventories 618,350 520,238 98,112Prepaid expenses and other current assets 287,467 280,093 7,374Long-term receivables 3,726 3,711 15Investments 576,768 571,458 5,310Net property, plant and equipment 606,837 605,285 1,552Other assets 209,256 221,277 (12,021)Total assets 3,429,222 3,452,231 (23,009) (Liabilities and shareholders' equity)Current liabilities 1,483,873 1,529,838 (45,965)Bank loans and current portion of long-term debt 255,357 253,141 2,216Trade payables 689,203 739,585 (50,382)Other current liabilities 539,313 537,112 2,201Long-term debt 371,032 387,941 (16,909)Retirement and severance benefits 344,103 360,713 (16,610)Other fixed liabilities 55,192 54,169 1,023Minority interests 62,584 60,361 2,223Shareholders' equity 1,112,438 1,059,209 53,229Common stock 175,820 175,820 -Capital surplus 210,896 210,910 (14)Retained earnings 665,667 632,003 33,664Accumulated other comprehensive income (loss) 60,499 40,932 19,567Treasury stock at cost (444) (456) 12Total liabilities and shareholders' equity 3,429,222 3,452,231 (23,009) Balance of Debt 626,389 641,082 (14,693) Accumulated other comprehensive income (loss):Foreign currency translation adjustments 43,623 32,088 11,535Pension liability adjustments (53,249) (59,723) 6,474Unrealized gains on securities 70,088 68,578 1,510Unrealized gains (losses) on derivative instruments 37 (11) 48 CONSOLIDATED CASH FLOW STATEMENT (In millions of yen) FY'08 Ql (A) FY'07 Ql (B) (April 1,2007- (April 1,2006- A/B June 30, 2007) June 30, 2006) I Cash flows from operating activities 1 Net income 46,543 24,883 21,6602 Adjustments to reconcile net income to net cash provided by operating activities (1) Depreciation of tangible fixed assets and other 26,140 34,649 (8,509) (2) Decrease in trade receivables 116,854 137,636 (20,782) (3) Decrease (increase) in inventories (90,471) (80,867) (9,604) (4) Increase (decrease) in trade payables (53,236) (52,912) (324) (5) Other, net (10,401) (5,552) (4,849) Net cash provided by operating activities 35,429 57,837 (22,408) II Cash flows from investing activities 1 Capital expenditure (22,325) (25,373) 3,0482 Proceeds from sale of property, plant and equipment 1,013 2,634 (1,621)3 Purchase of short-term investments and investment securities (6,349) (8,872) 2,5234 Proceeds from sale of short-term investments and investment securities 5,387 8,399 (3,012)5 Other, net 1,729 2,178 (449) Net cash used in investing activities (20,545) (21,034) 489 I+11 Free cash flow 14,884 36,803 (21,919) III Cash flows from financing activities 1 Proceeds from long-term debt 800 16,000 (15,200)2 Repayment of long-term debt (5,515) (24,977) 19,4623 Increase (decrease) in bank loans, net (15,381) 6,903 (22,284)4 Dividends paid (12,879) (10,731) (2,148)5 Purchase of treasury stock (43) (30) (13)6 Reissuance of treasury stock 41 95 (54) Net cash provided by (used in) financing activities (32,977) (12,740) (20,237) IV Effect of exchange rate changes on cash and cash equivalents 4,439 (425) 4,864 V Net increase (decrease) in cash and cash equivalents (13,654) 23,638 (37,292) VI Cash and cash equivalents at beginning of period 342,640 304,514 38,126 VII Cash and cash equivalents at end of period 328,986 328,152 834 CONSOLIDATED SEGMENT INFORMATION 1. SALES AND OPERATING INCOME BY BUSINESS SEGMENT (In millions of yen) FY'08 Q1 FY'07 Q1 (Apr. 1, 2007 - Jun. 30,2007) (Apr. 1, 2006 - Jun. 30, 2006) Business Segment Sales Operating Sales Operating A/B income income % (A) % of total (B) % of total Energy and Electric Systems 195,473 19.7 13,334 167,412 18.0 1,563 117 Industrial Automation Systems 239,797 24.2 37,882 229,769 24.7 33,005 104 Information and Communication Systems 120,341 12.2 98 139,371 15.0 5,262 86 Electronic Devices 47,592 4.8 2,415 46,830 5.1 3,521 102 Home Appliances 238,041 24.0 18,584 207,576 22.3 3,032 115 Others 150,054 15.1 2,334 138,835 14.9 2,538 108 Subtotal 991,298 100.0 74,647 929,793 100.0 48,921 107 Eliminations and other (118,575) - (8,675) (108,263) - (8,327) - Total 872,723 - 65,972 821,530 - 40,594 106 * Note: Inter-segment sales are included in the above chart. 2. SALES AND OPERATING INCOME BY LOCATION (In millions of yen) FY'08 Q1 FY'07 Q1 (Apr. 1, 2007 - Jun. 30,2007) (Apr. 1, 2006 - Jun. 30, 2006) A/B Location Sales (A) Operating Sales (B) Operating % income (loss) income (loss) Japan 723,894 49,974 699,458 32,893 103 North America 61,825 (249) 63,176 (1,321) 98 Asia (excluding Japan) 139,047 13,432 112,314 7,647 124 Europe 107,437 6,791 74,866 3,476 144 Others 7,515 152 6,708 234 112 Subtotal 1,039,718 70,100 956,522 42,929 109 Eliminations (166,995) (4,128) (134,992) (2,335) - Total 872,723 65,972 821,530 40,594 106 * Note: Inter-segment sales are included in the above chart. 3. OVERSEAS SALES (In millions of yen) FY'08 Q1 FY'07 Q1 (Apr. 1,2007 - Jun. 30,2007) (Apr. 1, 2006 - Jun. 30, 2006) Location Sales (A) % of Sales (B) % of A/B total net sales total net sales % North America 67,144 7.7 66,224 8.1 101 Asia (excluding Japan) 124,370 14.2 106,658 13.0 117 Europe 116,980 13.4 85,924 10.4 136 Others 18,817 2.2 15,600 1.9 121 Total overseas sales 327,311 37.5 274,406 33.4 119 Cautionary Statement The expectation of operating results herein and any associated statement to bemade orally with respect to the Company's current plans, estimates, strategiesand beliefs and any other statements that are not historical facts are forward-looking statements. Words such as "expects", "anticipates", "plans", "believes","scheduled", "estimated", "targeted" along with any variations of these wordsand similar expressions are intended to identify forward-looking statementswhich include but are not limited to projections of revenues, earnings,performance and production. While the statements herein are based on certainassumptions and premises that the Company trusts and considers to be reasonableunder the circumstances to the date of announcement, you are requested to kindlytake note that actual operating results are subject to change due to any of thefactors as contemplated hereunder and/or any additional factor unforeseeable asof the date of this announcement. Such factors materially affecting theexpectations expressed herein shall include but are not limited to thefollowing: (1) Important trends The Mitsubishi Electric Group's operations may be affected by trends in the global economy, social conditions, laws, tax codes, and regulations. (2) Foreign currency exchange rates Fluctuations in foreign currency markets may affect Mitsubishi Electric's sales of exported products and purchases of imported materials that are denominated in U.S. dollars or euros, as well as its Asian production bases' sales of exported products and purchases of imported materials that are denominated in foreign currencies. (3) Stock markets A fall in stock market prices may cause Mitsubishi Electric to record devaluation losses on marketable securities, or cause an increase in retirement benefit obligations in accordance with a decline in the fair value of pension assets. (4) Supply/demand balance for products and procurement conditions for materials and components A decline in prices and shipments due to changes in the supply/demand balance may adversely affect mainly Mitsubishi Electric's Information and Communication Systems, Electronic Devices, and Home Appliances segments. In addition, an increase in material prices due to a worsening of material and component procurement conditions may adversely affect all of Mitsubishi Electric's operations. (5) Fund procurement An increase in interest rates, the yen interest rate in particular, would increase Mitsubishi Electric's interest expense. (6) Significant patent matters Important patent filings, licensing, copyrights and patent-related disputes may adversely affect related businesses. (7) Environmental matters We may appropriate funds for losses or increase allowances to respond to regulation trends or outbreaks of issues related to the environment. This may impact manufacturing and all corporate activities of the Mitsubishi Electric Group. (8) Quality of products and services We may appropriate funds for losses from defective services or products, and the lowered reputation of the quality of all our products and services may affect the entire Mitsubishi Electric group. (9) Litigation and other legal proceedings The Mitsubishi Electric Group's operations may be affected by lawsuits or other legal proceedings against Mitsubishi Electric, its subsidiaries and/or equity-method affiliated companies. (10) Disruptive changes Disruptive changes in technology, development of products using new technology, timing of production, and market introduction may adversely affect performance mainly in Mitsubishi Electric's Information and Communication Systems, Electronic Devices, and Home Appliances segments. (11) Business restructuring The Mitsubishi Electric Group may record losses due to restructuring measures. (12) Natural disasters The Mitsubishi Electric Group's operations, particularly manufacturing activities, may be affected by the occurrence of earthquakes, typhoons, tsunami, fires and other large-scale disasters. (13) Other significant factors The Mitsubishi Electric Group's operations may be affected by the outbreak of social or political upheaval due to terrorism, war or other factors. About Mitsubishi Electric With over 80 years of experience in providing reliable, high-quality products toboth corporate clients and general consumers all over the world, MitsubishiElectric Corporation (TSE:6503) is a recognized world leader in the manufacture,marketing and sales of electrical and electronic equipment used in informationprocessing and communications, space development and satellite communications,consumer electronics, industrial technology, energy, transportation and buildingequipment. The company recorded consolidated group sales of 3,855.7 billion yen(US$ 32.7 billion*) in the fiscal year ended March 31, 2007. For moreinformation visit http://global.mitsubishielectric.com * At an exchange rate of 118 yen to the US dollar, the rate given by the Tokyo Foreign Exchange Market on March 31, 2007 This information is provided by RNS The company news service from the London Stock Exchange