Denso posts record profit for 2013/14; sees decline this year
TOKYO, April 25
TOKYO, April 25 (Reuters) - Japanese auto parts maker Denso Corp on Friday posted its highest-ever operating profit for the financial year ended March, backed by a weaker yen and strong sales in Japan and North America.
The manufacturer also said profit is likely to fall this year partly due to a decline in Japanese auto sales that is widely expected to take place following a sales tax hike in April.
For the just-ended year, however, earnings received a boost from a yen which fell around 10 percent against the U.S. dollar, helping Japanese car makers boost sales overseas and allowing companies to convert revenue made abroad at a more favourable rate.
Denso reported 377.7 billion yen ($3.7 billion) in operating profit for the full year, up 44 percent from the same period a year earlier. For the January-March quarter, operating profit was 87.8 billion yen, up 18 percent.
For the year to March 2015, Denso expects to post 350 billion yen in operating profit, down 7.3 percent.
"This is due to the decrease in production volume within Japan, in addition to investment costs for initiating new products and to increase capabilities in overseas plants for future competitiveness," Chief Executive Nobuaki Katoh said in a statement.
Denso shares fell 3.2 percent in morning trade on Friday, underperforming the Nikkei index that rose 0.6 percent.
The results of Denso, 22 percent owned by Toyota Motor Corp , serve as an indicator for the earnings of car makers as well as other components companies.
Japanese car makers are widely expected to post strong profits for the just-ended year as they reap the benefits of a weaker yen that make exporting profitable.
For the year to March 2015, Denso said it is assuming average exchanges rate of 100 yen to the U.S. dollar and 135 yen to the euro.
($1 = 102.2350 Japanese Yen) (Reporting by Yoko Kubota; Editing by Christopher Cushing)
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