Nippon
“Its hard to foresee our business” for the second-half starting October because of Greeces fiscal woes which may lead to a global credit crunch and recession, Masahiro Hashimoto, president and chief operating officer of Dainippon said in a Feb. 16 interview in Kyoto, where the company is based.
Greeces deficit, the highest in the EU at 12.7 percent of gross domestic product last year, has triggered concern about the regions stability, weakening the euro. The 16-nation currency dropped to 120.71, the lowest in about a year against the yen on Feb. 5, reducing the value of Japanese companies European sales when converted into their local currency.
Dainippon, which is predicting back-to-back annual losses for the year ending March 31, this month narrowed its net loss forecast by 13 percent to 10.5 billion yen ($116 million), citing increased demand for personal computers and higher capital spending at contract manufacturers of chips. The estimate is based on a projection that the euro will trade at 125 against the Japanese yen, the company said at the time.
The company derived more than 9 percent of its revenue from Europe in the 12 months ended March 31, according to data compiled by Bloomberg.
No Sudden Drop
“We probably wont see a sudden drop in demand in the first half of next fiscal year,” based on semiconductor makers capital spending plans, Hashimoto said. Dainippons chip-making gear accounts for about 74 percent of the companys sales, according to its latest earnings statement.
Dainippon rose 4 percent to close at 447 yen on the Tokyo Stock Exchange yesterday, extending its gain this year to 10 percent. Japans benchmark Nikkei 225 Stock Average rose 2.7 percent. The stock more than doubled last year.
Dainippon, which supplies Intel Corp., Samsung Electronics Co. and Toshiba Corp., will probably win orders of at least 35 billion yen in each of the next two quarters, continuing a year- long recovery, Hashimoto said.
The company got orders worth 34 billion yen in the quarter ended Dec. 31, he said. Orders for the current three-month period will probably be between 32 billion yen and 36 billion yen, he said.
Orders totaled 34.3 billion yen in the quarter ended Sept. 30, 2009, the first time Dainippon received more than 30 billion yen in orders since the July to September period in 2008 according to the companys Web site.
Dainippons liquid-crystal-display-making equipment, which accounted for 28.5 percent of the companys sales last year, may see orders increase by about 40 percent to 10 to 12 billion yen from the previous quarter, Hashimoto said. Orders for the year to March rose more than 12-fold.