Domestic slowdown hits Omron's core markets

Omron Corp has published its consolidated financial results for the nine months ended 31st December 2004.

Omron Corp has published its consolidated financial results for the nine months ended 31st December 2004.

The Omron Group's net sales for the first three quarters totalled Y449.6 billion, a 7.9% year-on-year increase.

Operating income was Y45.8 billion, a 22.8% year-on-year increase, income before income taxes totalled Y43.1 billion, a 23.9% increase, and net income totalled Y24.8 billion, a 45.1% increase over the same period in the previous year.

The Omron Group has revised forecasts for consolidated net sales, net income before taxes and net income for the fiscal year ending 31st March 2005 down from the previously announced forecast (28th October 2004) as a consequence of a downward revision of sales forecasts for the second half in the company's core industrial automation business and electronic components business, due to an economic slowdown in Japan since the beginning of the autumn.

Nonconsolidated net sales for the fiscal year ending 31st March 2005 are expected to be generally in line with the previously announced forecast on 28th October 2004.

However, ordinary income and net income are projected to be higher than the previous announcement because of factors including increased dividends from overseas subsidiaries.

Total assets were Y573.2 billion, a decrease of Y18.9 billion from the end of the previous fiscal year.

Shareholders' equity was Y306.7 billion, an increase of Y32.0 billion from the end of the previous fiscal year.

As a result, the ratio of shareholders' equity to total assets increased to 53.5% from 46.4% at the end of the previous fiscal year.

As for cash flow, net cash provided by operating activities was Y36.4 billion, a decrease of Y7.0 billion from the same period in the previous year, as a result of the increase in net income and an increase in inventories compared with the end of the previous fiscal year.

Net cash used in investing activities was Y27.5 billion, an increase of Y6.9 billion compared with the same period in the previous year, as Omron aggressively made investments for future growth.

Net cash used in financing activities was Y35.9 billion, an increase of Y16.5 billion from the same period in the previous year.

Principal factors were a decrease in interest-bearing debt of Y27.4 billion due to the redemption of unsecured convertible bonds and other long-term debt, an increase in cash dividends of Y5.6 billion, including a commemorative dividend, and a Y2.9 billion expenditure in the acquisition of treasury stock.

As a result, cash and cash equivalents at the end of the period were Y68.8 bil, a decrease of Y26.2 billion from the end of the previous fiscal year.

In the fourth quarter (the three months from January through March 2005), the slowdown in the Japanese economy that began in autumn is expected to continue, with an ongoing adjustment phase in IT and digital-related demand.

Amid these conditions, sales of the Omron Group's core industrial automation business and electronic components business are expected to be lower than previously announced on 28th October 2004, reflecting the effects of restrained capital investment due to the economic slowdown.

On a consolidated basis, Omron projects net sales of Y610.0 billion,a year-on-year increase of 4.3%, income before income taxes of Y53.5 billion, a year-on-year increase of 11.5% and net income of Y31.0 billion, a year-on-year increase of 15.6%.

In nonconsolidated results, net sales are projected to be generally in line with the previous announcement on 28th October 2004.

However, ordinary income and net income are projected to be higher than the previous announcement because of factors including increased dividends from overseas subsidiaries.

Omron projects non-consolidated net sales of Y337.0 billion, a year-on-year decrease of 4.0%, ordinary income of Y26.3 billion, a year-on-year increase of 101.3%, and net income of Y15.5 billion, a year-on-year increase of 147.1%.

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