Kyocera: Economic Situation and Business Environment
Despite increases in public investment and personal consumption, the Japanese economy weakened in the year ended 31 March 2013 due primarily to a decrease in exports reflecting a slowdown from the second quarter (1 July to 30 September 2012) in economies overseas, particularly in Europe and Asia, and to stagnant growth in capital investment in the corporate sector.
The US economy expanded moderately on the back of growth in personal consumption and recovery in housing investment. On the other hand, the European economy remained in a recessionary phase due to the impact of the financial crisis. The slowdown in the Chinese economy intensified due mainly to weakening exports. In the digital consumer equipment market, which is the principal market for Kyocera Corporation and its consolidated subsidiaries, shipment volume was slow overall for conventional mobile phone handsets, PCs and flat-screen TVs despite significant growth for smartphones and tablet PCs compared with the previous fiscal year ended 31 March 2012 (fiscal 2012). In contrast, the solar energy market in Japan expanded substantially due primarily to growth in demand in the residential sector and a sharp increase in demand in the public and industrial sectors, which includes mega-solar power projects, as a result of the introduction of feed-in tariff for renewable energy in July 2012. Consolidated net sales for fiscal 2013 increased by JPY 89 184 million, or 7,5 %, to JPY 1 280 054 million, compared with JPY 1 190 870 million for fiscal 2012, due primarily to sales growth in the Applied Ceramic Products Group and the Semiconductor Parts Group and a full-year contribution from a consolidated subsidiary newly added in fiscal 2012. Profit from operations decreased by JPY 20 749 million, or 21,2 %, to JPY 76 926 million, compared with JPY 97 675 million for fiscal 2012 due to the recording of a charge of JPY 21 300 million for environmental remediation in New Bedford Harbor/US by AVX Corporation, a US subsidiary. In the year ending 31 March 2014, the Japanese economy is expected to pick up due primarily to an improvement in the export environment on the back of correction to the yen’s appreciation and to the effects of the government’s economic and monetary policies. The US economy is projected to continue expanding moderately. In the information and communications market, the main market for Kyocera, production activities for digital consumer equipment are projected to show a general recovery trend, including growth in such products as smartphones and tablet PCs. In addition, production activities in the industrial machinery market and automotive related markets are expected to recover moderately as well. In the environment and energy market, a continued increase in demand for solar energy systems in Japan is projected. Overall the business environment surrounding Kyocera for fiscal 2014 is expected to improve compared with fiscal 2013. (6/2013)