MEL.L Regulatory News (MEL)

28 Jul 2006 08:44

Mitsubishi Electric Corporation28 July 2006 FOR IMMEDIATE RELEASE No. 2388 Investor Relations Inquiries: Media Contact: Yasumitsu Kugenuma Travis Woodward Corporate Finance Division Public Relations Division Mitsubishi Electric Corporation Mitsubishi Electric Corporation Tel: +81-3-3218-2391 Tel: +81-3-3218-3380 Cad.Irg@rk.MitsubishiElectric.co.jp Travis.Woodward@eb.MitsubishiElectric.co.jp http://global.mitsubishielectric.com/news/ MITSUBISHI ELECTRIC ANNOUNCES CONSOLIDATED FINANCIAL RESULTS FOR THE FIRST QUARTER OF FISCAL 2007 Tokyo, July 28, 2006 - Mitsubishi Electric Corporation (President and CEO:Setsuhiro Shimomura) announced today its financial results for the first quarterending June 30, 2006, of the current fiscal year ending March 31, 2007 (fiscal2007). Consolidated Financial Results Net sales 821.5 billion yen (11% increase from the same quarter last year) Operating income 40.5 billion yen (94% increase from the same quarter last year) Income before income taxes 40.6 billion yen (82% increase from the same quarter last year) Net income 24.8 billion yen (123% increase from the same quarter last year) Management conditions during the first quarter of fiscal 2007 saw a continuedtrend of underlying strength in the global economy. In terms of the Japaneseeconomy, which has recently evidenced outgrowing sense of breaking away from itsdeflationary slump, it showed steady and active demand in capital expenditures. Under these circumstances, first quarter net sales grew 11% compared to the sameperiod of the previous fiscal year to 821.5 billion yen. There were increases inthe Energy and Electric Systems, Industrial Automation Systems, Information andCommunication Systems, as well as the Electronic Devices segments. Operating income increased 94% from the same period of the previous fiscal yearto 40.5 billion yen. This is mainly due to the increases in profits of theIndustrial Automation Systems and Electronic Devices segments, as well as thereturn to profitability of the Energy and Electric Systems and Information andCommunication Systems segments. Consolidated Financial Results by Business Segment Energy and Electric Systems Total sales 167.4 billion yen (17% increase from the same quarter last year) Operating income 1.5 billion yen (4.8 billion yen improvement 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 toincreases in the electric transmission and distribution related businesses andthe domestic power generation businesses, in addition to increases in thebusinesses of electric equipment for rolling stock both domestic and overseas. The building system business experienced increases in both orders and salescompared to the same period of the previous fiscal year due to large domesticorders in elevators and escalators as well as increases in initiatives for USAand the Middle East. As a result, total sales for this segment increased 17% from the same period ofthe previous fiscal year, and operating income improved 4.8 billion, returningto profitability. Industrial Automation Systems Total sales 229.7 billion yen (16% increase from the same quarter last year) Operating income 33.0 billion yen (11.1 billion yen increase from the same quarter last year) The factory automation systems business saw increases in both orders and salescompared to the same period of the previous fiscal year due to a boom indomestic and Asian capital expenditures on flat-panel displays, semiconductorsand surface mounting systems. The automotive equipment business saw an increase in both orders and salescompared to the same period of the previous fiscal year due to increases inalternators and starters, etc for domestic and overseas automotivemanufacturers. As a result, total sales for this segment showed an increase of 16% compared tothe same period of the previous fiscal year. Operating income increased 11.1billion due to increases in sales, etc. Information and Communication Systems Total sales 139.3 billion yen (30% increase from the same quarter last year) Operating income 5.2 billion yen (11.2 billion yen improvement from the same quarter last year) The telecommunications equipment business saw increases in both orders and salescompared to the same period of the previous fiscal year, due to increases in thethird-generation mobile handsets for domestic distribution, optical broadbandaccess system products, etc. The sales of the information systems and service business were unchanged fromthe same period of the previous fiscal year, mainly due to increases in the ITinfrastructure service business, despite certain decreases in the office serverbusiness etc. The electronic system business saw increases in space system business, and bothorders and sales increased. As a result, total sales for this segment showed an increase of 30% compared tothe same period of the previous fiscal year. Operating income improved 11.2billion yen due to increases in sales, etc., returning to profitability. Electronic Devices Total sales 46.8 billion yen (16% increase from the same quarter last year) Operating income 3.5 billion yen (0.8 billion yen increase from the same quarter last year) The semiconductor business saw an increase in sales from the same period of theprevious fiscal year due to increases in industrial power modules and poweramplifiers for mobile handsets etc., despite a decrease in orders affected by aprice drop of red laser diodes etc. The liquid crystal business saw increases in small and medium sized productsmainly for industrial use, and both orders and sales increased from the sameperiod of the previous fiscal year. As a result, total sales for the segment increased by 16% compared to the sameperiod of the previous fiscal year. Operating income increased 0.8 billion yen,due to increases in sales, etc. Home Appliances Total sales 207.5 billion yen (3% decrease from the same quarter last year) Operating income 3.0 billion yen (8.3 billion yen decrease from the same quarter last year) The home appliance business saw a decrease in sales of 3% compared to the sameperiod of the previous fiscal year. Despite increases in sales of electric hotwater supply systems and induction heating cooking systems for use in all-electric-powered homes as well as solar power generation systems, salesdecreased in air conditioners for the domestic market, refrigerators and DVDs.Operating income also decreased 8.3 billion yen due to a decline in prices, etc. Others Total sales 138.8 billion yen (10% increase from the same quarter last year) Operating income 2.5 billion yen (unchanged from the same quarter last year) Sales increased 10% compared to the same period of the previous fiscal year inaffiliated companies mainly in material procurement and engineering. Operatingincome remained unchanged. Forecast for the first half of Fiscal 2007 (ending September 30, 2006) Consolidated Financial Results The current earnings forecast for the first half of Fiscal 2007 are writtenbelow. There are no changes from the earnings forecast from the yearly resultsannouncement on April 27, 2006. Net sales 1,750 billion yen (6% increase from the same period last year) Operating income 60 billion yen (30% increase from the same period last year) Income before income taxes 55 billion yen (8% increase from the same period last year) Net income 35 billion yen (20% increase from the same period last year) CONSOLIDATED FINANCIAL RESULTS SUMMARY (In billions of yen) FY '07 FY '06 A/B Q1 (A) Q1 (B) (%) Net sales 821.5 737.9 111 Operating income 40.5 20.9 194 Income before income 40.6 22.4 182 taxes Net income 24.8 11.1 223 Net income per share (in yen) 11.59 5.20 223 Note: 1) Consolidated financial statements are compiled according to U.S. GAAP. 2) Company has 148 consolidated subsidiaries. 3) This report is unaudited. FY'07 Q1: April 1, 2006-June 30, 2006FY'06 Q1: April 1, 2005-June 30, 2005 CONSOLIDATED PROFIT AND LOSS STATEMENT (In millions of yen) FY '07 % of total FY '06 % of total A/B Q1 (A) Q1 (B) (A - B) (%) Net sales 821,530 100.0 737,984 100.0 83,546 111 Cost of sales 600,018 73.0 543,072 73.6 56,946 110 Selling, general and 180,918 22.1 173,986 23.6 6,932 104 administrative expenses Operating income 40,594 4.9 20,926 2.8 19,668 194 Other income 11,429 1.4 8,206 1.1 3,223 139 Interest and 3,059 0.4 2,917 0.4 142 105 Dividends Other 8,370 1.0 5,289 0.7 3,081 158 Other expenses 11,337 1.3 6,721 0.9 4,616 169 Interest 2,488 0.3 2,384 0.3 104 104 Other 8,849 1.0 4,337 0.6 4,512 204 Income before income taxes 40,686 5.0 22,411 3.0 18,275 182 Income taxes 20,068 2.5 12,352 1.7 7,716 162 Equity in earnings of affiliated companies 4,265 0.5 1,085 0.2 3,180 393 Net income 24,883 3.0 11,144 1.5 13,739 223 FY'07 Q1: April 1, 2006-June 30, 2006FY'06 Q1: April 1, 2005-June 30, 2005 CONSOLIDATED BALANCE SHEET (In millions of yen) FY ' 07 FY ' 06 A - B Q1 (A) (B) (ending June 30, 2006) (ending March 31, 2006) (Assets) 1,862,774 1,886,779 (24,005) Current assets Cash and cash equivalents 328,152 304,514 23,638 Short-term investments 8,055 7,991 64 Trade receivables 706,367 843,600 (137,233) Inventories 572,783 491,950 80,833 Prepaid expenses and other current assets 247,417 238,724 8,693 Long-term receivables 4,096 4,378 (282) Investments 560,076 584,871 (24,795) Net property, plant and equipment 592,454 589,998 2,456 Other assets 258,600 247,716 10,884 Total assets 3,278,000 3,313,742 (35,742) (Liabilities and shareholders' equity) 1,379,408 1,440,133 (60,725) Current liabilities Bank loans and current portion of long-term debt 234,566 247,595 (13,029) Trade payables 661,723 714,455 (52,732) Other current liabilities 483,119 478,083 5,036 Long-term debt 461,779 445,583 16,196 Retirement and severance benefits 449,190 420,348 28,842 Other fixed liabilities 11,928 13,081 (1,153) Minority interests 53,792 52,395 1,397 Shareholders' equity 921,903 942,202 (20,299) Common stock 175,820 175,820 - Capital surplus 210,926 210,938 (12) Retained earnings 542,392 528,240 14,152 Accumulated other comprehensive income (loss) (6,799) 27,718 (34,517) Treasury stock at cost (436) (514) 78 Total liabilities and shareholders' equity 3,278,000 3,313,742 (35,742) Balance of Debt 696,345 693,178 3,167 Accumulated other comprehensive income (loss) Foreign currency translation adjustments 7,943 9,426 (1,483) Minimum pension liability adjustments (81,200) (58,695) (22,505) Unrealized gains on securities 66,434 76,970 (10,536) Unrealized gains on derivative instruments 24 17 7 CONSOLIDATED CASH FLOW (In millions of yen) FY '07 FY '06 Q1 (A) Q1 (B) A - B I Cash flows from operating activities 1 Net income 24,883 11,144 13,739 2 Adjustments to reconcile net income to net cash provided by operating activities (1) Depreciation of tangible fixed assets and other 34,649 20,926 13,723 (2) Decrease in trade receivables 137,636 149,182 (11,546) (3) Decrease (increase) in inventories (80,867) (53,222) (27,645) (4) Increase (decrease) in trade payables (52,912) (79,754) 26,842 (5) Other, net (5,552) 6,826 (12,378) Net cash provided by operating activities 57,837 55,102 2,735 II Cash flows from investing activities 1 Capital expenditure (25,373) (16,478) (8,895) 2 Proceeds from sale of property, plant and equipment 2,634 1,247 1,387 3 Purchase of short-term investments and investment (8,872) (10,437) 1,565 securities 4 Proceeds from sale of short-term investments and 8,399 9,122 (723) investment securities 5 Other, net 2,178 2,491 (313) Net cash used in investing activities (21,034) (14,055) (6,979) I + II Free cash flow 36,803 41,047 (4,244) III Cash flows from financing activities 1 Proceeds from long-term debt 16,000 10,530 5,470 2 Repayment of long-term debt (24,977) (26,588) 1,611 3 Increase in bank loans, net 6,903 701 6,202 4 Dividends paid (10,731) (8,584) (2,147) 5 Purchase of treasury stock (30) (4,474) 4,444 6 Reissuance of treasury stock 95 4 91 Net cash provided by (used in) financing activities (12,740) (28,411) 15,671 IV Effect of exchange rate changes on cash and cash (425) 953 (1,378) equivalents V Net increase in cash and cash equivalents 23,638 13,589 10,049 VI Cash and cash equivalents at beginning of period 304,514 246,563 57,951 VII Cash and cash equivalents at the end of period 328,152 260,152 68,000 FY'07 Q1: April 1, 2006-June 30, 2006FY'06 Q1: April 1, 2005-June 30, 2005 CONSOLIDATED SEGMENT INFORMATION Sales and Operating Income by Business Segment (In millions of yen) FY '07 FY '06 A/B (%) Q1 Q1 Business Segment Sales (A) % of total Operating Sales (B) % of total Operating income income (loss) (loss) Energy and Electric 167,412 18.0 1,563 143,650 17.3 (3,249) 117 Systems Industrial 229,769 24.7 33,005 197,439 23.8 21,882 116 Automation Systems Information and 139,371 15.0 5,262 107,581 13.0 (5,939) 130 Communication Systems Electronic Devices 46,830 5.1 3,521 40,385 4.9 2,642 116 Home Appliances 207,576 22.3 3,032 213,997 25.8 11,346 97 Others 138,835 14.9 2,538 126,498 15.2 2,515 110 Subtotal 929,793 100.0 48,921 829,550 100.0 29,197 112 Eliminations and (108,263) - (8,327) (91,566) - (8,271) - other Total 821,530 - 40,594 737,984 - 20,926 111 *Note: Inter-segment sales are included in the above chart. FY'07 Q1: April 1, 2006-June 30, 2006FY'06 Q1: April 1, 2005-June 30, 2005 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 theglobal economy, social conditions, laws, tax codes, and regulations. (2) Foreign currency exchange rates Fluctuations in foreign currency markets may affect Mitsubishi Electric's salesof exported products and purchases of imported materials that are denominated inU.S. dollars or euros, as well as its Asian production bases' sales ofexported products and purchases of imported materials that are denominated inforeign currencies. (3) Stock markets A fall in stock market prices may cause Mitsubishi Electric to recorddevaluation losses on marketable securities, or cause an increase in retirementbenefit obligations in accordance with a decline in the fair value of pensionassets. (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 balancemay adversely affect mainly Mitsubishi Electric's Information and CommunicationSystems, Electronic Devices, and Home Appliances segments. In addition, anincrease in material prices due to a worsening of material and componentprocurement conditions may adversely affect all of Mitsubishi Electric'soperations. (5) Fund procurement An increase in interest rates, the yen interest rate in particular, wouldincrease Mitsubishi Electric's interest expenses. (6) Significant patent matters Important patent filings, licensing, copyrights and patent-related disputes mayadversely affect related businesses. (7) Litigation and other legal proceedings The Mitsubishi Electric Group's operations may be affected by lawsuits or otherlegal proceedings against Mitsubishi Electric, its subsidiaries and/or equity-method affiliated companies. (8) Disruptive changes Disruptive changes in technology, development of products using new technology,timing of production, and market introduction may adversely affect performancemainly in Mitsubishi Electric's Information and Communication Systems,Electronic Devices, and Home Appliances segments. (9) Business restructuring The Mitsubishi Electric Group may record losses due to restructuring measures. (10) Natural disasters The Mitsubishi Electric Group's operations, particularly manufacturingactivities, may be affected by the occurrence of earthquakes, typhoons, tsunami,fires and other large-scale disasters. (11) Other significant factors The Mitsubishi Electric Group's operations may be affected by the outbreak ofsocial 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 3,604 billion yen(US$ 30.8billion*) in the fiscal year ended March 31, 2006. For more informationvisit http://global.mitsubishielectric.com *At an exchange rate of 117 yen to the US dollar, the rate given by the Tokyo Foreign Exchange Market on March 31, 2006. This information is provided by RNS The company news service from the London Stock Exchange