TOKYO, April 25 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
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
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
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)