Sales revenue in the six months ended 30 September 2019 were just 0.2% off the same period ended 30 September 2018, but profits fell 27 percent in the same period.
Kyocera attributes the fall in profits in the H1 results due to a decline in sales in the Component Business, which has a higher margin profile.
Sales revenue in the Equipment & Systems Business were up, mainly due to increased sales of mobile phones in the Japanese market. Meanwhile sales revenue in the Components Business (which includes the Document Solutions segment) decreased which Kyocera attributed to a slowdown in demand in the industrial machinery and automobile-related markets caused by trade friction between the US and China as well as economic slowdown in the Chinese market, which more than offset the contribution from M&A.
As a result, sales revenue for the first half decreased by ¥1,588 million ($225.46 million/ €201.89 million), or down 0.2%, to ¥799.050 million ($113.44 million/ €101.61 million), compared with the previous first half.
In the Document Solutions Group sales revenue for the first half decreased by ¥885 million ($125.65 million/ €112.55 million), or a decrease of 0.5 percent, to ¥177,884 million ($25.25 million/ €22.62 million), compared with ¥178,769 million ($25.38 million/ €22.73 million) in the previous first half.
Kyocera stated that despite the contribution from M&A activity conducted in fiscal 2019, sales revenue remained roughly unchanged due to the effect of the yen’s appreciation against the Euro.
Performance of the Kyocera Corporation and its consolidated subsidiaries in the first half met its projections made at the beginning of fiscal 2020, although demand for components fell short of its expectations.
Kyocera said that for the third quarter (the period from 1 October 2019 to 31 December 2019) and fourth quarter (the period from 1 January 2020 to 31 March 2020), expectations regarding the global economy remain uncertain.
“On the other hand, there are signs of recovery in demand for some products in the information and communications market. Furthermore, Kyocera still expects improved profitability to continue mainly as a result of the structural reforms implemented in fiscal 2019,” Kyocera added.
In light of these conditions, Kyocera has not made any changes to its consolidated financial forecasts for fiscal 2020, as announced on 25 April 2019, however, has revised its forecasts for individual reporting segments.
