Japan 5 Major Electric Wire Makers Posts Recurring Loss

Japanese major electric wire makers except Sumitomo Electric Industries posted consolidated recurring loss for fiscal 2008 ended March 2009. These 5 firms plan to post recurring profit for fiscal 2009. However, the major 6 firms including SEI estimate to post recurring loss for first half due to the demand stagnancy. They expect lower loss from copper inventory valuation in fiscal 2009. The earnings recovery depends on the demand recovery and the cost reduction efforts in 2009.

SEI reported the lower sales reduced the operating profit by 70 billion yen for fiscal 2008 from fiscal 2007 while Furukawa Electric’s the profit also decreased by 18.2 billion yen due to lower sales. The lower sales reduced the profit by 7.9 billion yen for Fujikura and by 13.6 billion yen for Hitachi Cable.

Furukawa Electric forecasts the lower sales reduces the operating profit by 17.5 billion yen in fiscal 2009 from fiscal 2008. The lower sales will reduce the profit by 3.5 billion yen for Fujikura and by 12.3 billion yen Hitachi Cable.

The copper inventory valuation loss also reduced their profit in fiscal 2008 from fiscal 2007. The loss reduced the profit by 8 billion yen for Furukawa Electric, by 6.5 billion yen for Fujikura, by 8.8 billion yen for Hitachi Cable and by 4 billion yen for SWCC Showa Holdings. They expect the loss would be zero for fiscal 2009 depending on the market.