by Staff Writers
Tokyo (AFP) Nov 1, 2011
Japanese high-tech firm Hitachi on Tuesday said its net profit fell 67.8 percent in the six months to September, hit by the impact of the March earthquake and a strong yen.
Hitachi's net profit came to 50.9 billion yen ($652 million) in the April-September first half, which was still slightly higher than a recently upgraded profit forecast of 50.0 billion yen. Operating profit fell 21.8 percent to 170.6 billion yen.
"Although we pushed with cutting materials and other costs, (the profit) came below the year-before level due to the impact of the Great East Japan Earthquake and the strong yen," the company said in a statement.
Sales edged up 1.6 percent to 4.57 trillion yen.
The impact of the strong yen is undermining Hitachi's efforts to win orders for large infrastructure projects overseas as new rivals from emerging markets become increasingly competitive, Hitachi president Takashi Miyoshi said.
"In price competition overseas, the strong yen is a huge disadvantage," he told reporters.
On a quarterly basis, Hitachi's net profit fell 33 percent from a year earlier to 48 billion yen in July-September.
Like many other firms, Hitachi -- whose products range from microchips to nuclear power equipment -- reported damage to its production facilities and electricity supply problems after the March 11 quake and tsunami.
The recovery of Japanese firms is threatened by the strong yen and the expected impact from the recent flooding in Thailand, which has hit manufacturers' production facilities and created a component supply shortage.
"If the yen further strengthens, we wouldn't be able to keep producing what we'd like to produce in Japan," said Miyoshi, adding that he welcomed the Japanese government's yen-selling intervention Monday.
Monday's yen-selling intervention came after the unit hit a fresh post-World War II high versus the dollar. Tokyo blames the rise on "speculators" and says the yen's current levels do not reflect Japan's economic reality.
Japan's manufacturers have staged a rebound since the March disasters that left around 20,000 dead or missing, triggered a nuclear crisis and shattered crucial supply chains, heavily disrupting Japanese industry.
Such efforts are being compromised by the strength of the Japanese currency, which could force more firms to shift jobs and production abroad in a further blow to the nation's slow economy.
Hitachi left unchanged its net-profit projection of 200 billion yen for the full year to March 2012, down 16 percent from a record 238.87 billion yen last year.
Operating profit is forecast to fall 10 percent to 400 billion yen on two percent sales growth to 9.5 trillion yen.
July-September operating profit fell nine percent to 118.2 billion yen.
Sales rose three percent to 2.4 trillion yen.
Global Trade News
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China manufacturing growth slows in October
Beijing (AFP) Nov 1, 2011
Manufacturing activity in China and other Asian economies remained weak in October, surveys showed Tuesday, as US and European economic woes hit demand for clothes, shoes and electronic gadgets. China is heavily reliant on exports to drive its economy - the second largest in the world - and the downturn in key US and European markets is already hurting manufacturers who employ millions of ... read more
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