Toyota-affiliated auto supplier Denso Corp. early today said it posted net income of ¥118.3 billion, or $1.02 billion at current exchange rates, in the six months to Sept 30, up 25.7 percent from the year-earlier period.
With blistering sales growth and a depreciated yen, Denso is poised to become the worlds largest auto supplier after its fiscal year concludes March 31, 2008.
Denso, which makes a variety of thermal, powertrain and electronics components for most of the worlds automakers, said its global revenue rose 14.5 percent to ¥1,947.8 billion, or $17.03 billion, in the first half of its fiscal year.
Sales growth was mainly due to the increase in overseas car production for Japanese auto manufacturers and the depreciated yen, Koji Kobayashi, Denso senior managing director, said in a prepared statement released at 2 a.m. EDT.
In spite of rising raw material costs and the increases in labor and depreciation costs, increased production volume and foreign exchange gain led to an increase in income.
Denso said its results improved in North, Central and South America because of increased production by Japanese automakers and sales expansion to General Motors and Ford Motor Co. Sales in the Americas rose 15.8 percent to ¥429.7 billion, or $3.72 billion.
In Europe, the supplier said it posted a 25.1 percent increase in sales to ¥298.7 billion, or $2.59 billion.
As a result of our good financial results in this interim period, we have revised and raised our fiscal year 2007 estimate, Kobayashi said in the statement.
Denso expects to finish the fiscal year with net income of ¥228 billion, or $1.98 billion, on global sales of ¥3,950.0 billion, or $34.22 billion -- a 9.4 percent gain from its previous fiscal year.
At this rate, Denso could pass German supplier Robert Bosch GmbH as the worlds largest auto supplier. Bosch ranked No. 1 on the Automotive News list of the top 100 global auto suppliers with worldwide original-equipment parts sales of $29.69 billion in fiscal 2006.
Japan, Denso, of Kariya, Japan, is 21 percent owned by Toyota Motor Corp. It ranked No. 3 on the Automotive News list last year with estimated worldwide original-equipment parts sales of $24.0 billion in 2006.