Japan Major Electric Cable Makers to Turn Red for F2008

Furukawa Electric announced on Monday the firm would post consolidated recurring loss of 14 billion yen and net loss of 29 billion yen for a fiscal year ending March 2009. The firm will post the first consolidated recurring loss and net loss since fiscal 2003 ended March 2004. The firm estimates consolidated net sales of 1.03 trillion yen for fiscal 2008, down by 12% from fiscal 2007, and operating profit of 10 billion yen, down by 79%.

Annual recurring profit is estimated to worse by 54.8 billion yen year-on-year and annual net profit to drop by 44.3 billion yen. Profits are impacted by drop down of product sales volume, plunge of copper and aluminium prices, and higher yen exchange rate against other currencies.

Furukawa Electric plans to integrate productive operations of copper bare wire, UV tape for semiconductor manufacturing, foamed plastic products and tin-plate copper strip, as well as asset-impairing accounting for low-profitability productive lines. The firm will reassign workers along the productive integrations and set extra closing days at domestic 4 plants in Mie, Nikko, Hiratsuka and Osaka.

The firm has already started compensation cut for directors by 10-20% in and after January, and worker downsizing mainly at offshore productive sites in and after October 2008, as well as minimization of capital expenditure and expense.

Fujikura announced on Monday the firm would post consolidated recurring loss of 4 billion yen and net loss of 11 billion yen for fiscal 2008. The firm would post the first consolidated recurring loss since the firm became listed in fiscal 1978 while the first net loss since fiscal 2002. The recurring profit would worse by 19.5 billion yen and the net profit by 16.5 billion yen from fiscal 2007.

Consolidated operating margin is estimated at zero for fiscal 2008, worsening by 17 billion yen from fiscal 2007. Consolidated net sales are estimated at 580 billion yen for fiscal 2008, down by 10% year-on-year. Sales and profits are impacted by lower product sales, copper price plunge and stronger yen exchange rate.