DENSO Corp. has announced its global financial results for the fiscal year ending March 31, 2016.
The company reported consolidated revenue of 4,524.5 billion yen ($40.2 billion US), a 5 percent increase from the previous year. Consolidated operating profit totaled 315.7 billion yen ($2.8 billion US), a 4.7 percent decrease from the previous year. Consolidated profit attributable to owners of the parent company totaled 244.3 billion yen ($2.2 billion US), a 5.5 percent decrease from the previous year.
“DENSO’s revenue increased due to an overseas production volume increase and the growth in sales, in addition to the impact of the weak yen. On the other hand, despite cost reduction effort and the production volume increase, operating profit decreased due to the increase in research and development cost and start-up cost for new products,” said Koji Arima, president and CEO of DENSO Corp.
In Japan, a production volume decrease mainly in compact cars led to a decrease in revenue to 2,646.6 billion yen ($23.5 billion US), a 0.7 percent decrease from the previous year. DENSO said an increase in R&D cost for future growth, in addition to the decrease in production volume and other expenses, led to an operating profit of 154.5 billion yen ($1.4 billion US), a 21.5 percent decrease from the previous year.
In North America, an increase in car production, boosted by the steady economic growth, led to an increase in revenue to 1,112.7 billion yen ($9.9 billion US), a 15.1 percent increase from the previous year. As a result of the increase in production volume, the operating profit totaled 47.7 billion yen ($423.4 million US), a 20.8 percent increase from the previous year.
In Europe, car production increased due to the recovery of the economic slump, which led to an increase in revenue to 593.6 billion yen ($5.3 billion US), a 7 percent increase from the previous year. Despite the production volume increase and the growth in sales, the depreciation expenses and other costs for start-up products led to the decrease in the operating profit to 14.4 billion yen ($127.9 million US), a 14.3 percent decrease from the previous year.
In Asia, the increase of car production resulted in a revenue increase of 1,161.2 billion yen ($10.3 billion US), a 10.6 percent increase from the previous year. As a result of the increase in production volume as well as cost reduction effort, an operating profit totaled 96.6 billion yen ($857.2 million US), a 19.4 percent increase from the previous year.
In other areas, mainly the South American region, including Brazil and Argentina, revenue totaled 59.5 billion yen ($528 million US), a 19.4 percent decrease from the previous year. The operating loss totaled 2 billion yen ($17.8 million US).
“For the new fiscal year, despite production volume increase and the growth in sales, revenue and operating profit will decrease due to the exchange rate,” said Arima.
