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DENSO Reports 21.5 Percent Increase in Net Sales for the First Quarter

Company makes an upward revision to its first-half forecast.

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KARIYA, Japan ― DENSO Corp. has announced its global financial results for the first quarter ending June 30.

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Consolidated net sales totaled 630.2 billion yen (US$7.8 billion), a 21.5 percent decrease from the previous year.

Consolidated operating loss totaled 4.4 billion yen (US$54.2 million), a decrease of 75 billion yen (US$929.4 million) from the previous year’s operating income of 70.7 billion yen (US$875.2 million).

Consolidated net income totaled 2.6 billion yen (US$32.0 million), a 94.4 percent decrease from the previous year.

“Due to the Great East Japan Earthquake, production level was considerably low in April and May,” said Sadahiro Usui, executive director of DENSO Corp. “However, it has rapidly recovered since June and now overall production is close to pre-quake levels. A significant decrease in car production and a temporary cost increase to comply with the affects of the earthquake led to a decrease in sales from the previous year and an operating loss.”
 
In Japan, the significant decrease in car production due to the Great East Japan Earthquake led to a decrease in sales to 398.8 billion yen (US$4.9 billion), a 24.7 percent decrease from the previous year. Decreases in production volume resulted in an operating loss of 24.4 billion yen (US$302.4 million), a decrease of 57.7 billion yen (US$714.7 million) from the previous year’s operating income.

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In North America, despite a sales increase to Ford, decreases in Japanese auto manufacturers’ production led to a decrease in sales to 101.1 billion yen (US$1.3 billion), a 30 percent decrease from the previous year. As a result of the decrease in production volume, the operating loss totaled 2.5 billion yen (US$31.4 million), a decrease of 10.1 billion yen (US$125.0 million) from the previous year’s operating income.

In Europe, an increase in sales mainly to European auto manufacturers led to an increase in sales to 108.6 billion yen (US$1.3 billion), a 4.0 percent increase from the previous year. Operating income totaled 3.2 billion yen (US$39.2 million), an 11.7 percent decrease from the previous year.
 
In Asia and Oceania, despite a sales increase to Hyundai Kia Automotive Group, a decrease in Japanese auto manufacturers’ car production resulted in a sales decrease to 147.3 billion yen (US$1.8 billion), a 10.2 percent decrease from the previous year. A decrease in production volume led to operating income of 13.3 billion yen (US$164.9 million), a 48.2 percent decrease from the previous year.

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In other areas, which mainly applies to the South America region, including countries such as Brazil and Argentina, sales totaled 15.8 billion yen (US$195.4 million), a 2 percent increase from the previous year, and operating income totaled 1.5 billion yen (US$18.9 million), a 17.1 percent decrease from the previous year.

“Considering the strong recovery from the earthquake, we have decided to upwardly revise the original forecasts for the first half financial results,” said Usui. “The dividend for the fiscal year ending March 31, 2012, is undecided, but we will announce the forecast as soon as possible.

“Despite the harsh business environment, such as the strong yen and rising raw materials costs, we will strive to make recovery in our financial results through reducing costs and improving productivity," Usui added.

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