Denso posts record profit for 2013-14
TOKYO (Reuters) -- Japanese auto parts maker Denso Corp., backed by a weaker yen and strong sales in Japan and North America, posted its highest-ever operating profit for the financial year ended March 31.
The supplier also said profit is likely to fall this year partly due to a decline in Japanese auto sales that is widely expected to take place following a sales tax hike in April.
For the just-ended year, however, earnings received a boost from a yen which fell around 10 percent against the U.S. dollar, helping Japanese car makers boost sales overseas and allowing companies to convert revenue made abroad at a more favorable rate.
Denso reported 377.7 billion yen ($3.7 billion) in operating profit for the full year, up 44 percent from the same period a year earlier. For the January-March quarter, operating profit was 87.8 billion yen, up 18 percent.
For the year to March 2015, Denso expects to post 350 billion yen in operating profit, down 7.3 percent.
"This is due to the decrease in production volume within Japan, in addition to investment costs for initiating new products and to increase capabilities in overseas plants for future competitiveness," CEO Nobuaki Katoh said in a statement.
The earnings at Denso, which is 22-percent owned by Toyota Motor Corp , serve as an indicator for the earnings of automakers as well as other automotive components suppliers.
Japanese carmakers are widely expected to post strong profits in the latest fiscal year as they reap the benefits of a weaker yen that make exporting profitable.
For the year to March 2015, Denso said it is assuming average exchanges rate of 100 yen to the U.S. dollar and 135 yen to the euro.Contact Automotive News