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Outline of Performance for the Interim Period of the Fiscal Year
Ending March 31, 2007, and Revised Outlook for the Full Fiscal Year
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| Performance for the Interim Period––Gain in Sales Year on Year, Slight Decline in Operating Income, Increase in Recurring Profit and Net Income |
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Yamaha’s consolidated net sales for the interim period of the fiscal year that will end on March 31, 2007, showed an increase of 2.8% from the interim period of the previous fiscal year, to ¥264.5 billion. Although sales in the AV/IT, electronic equipment and metal products, and lifestyle related product segments posted slight declines, the Company’s mainstay musical instruments segment and other businesses reported increases in sales.
Consolidated operating income for the interim period declined 3.7% year on year, to ¥13.8 billion, as increases in operating income in the musical instruments segment were insufficient to offset decreases in the electronic equipment and metal products and lifestyle related product segments. Along with an increase in equity in earnings of affiliates, recurring profit rose 7.5% year on year, to ¥22.9 billion, and interim net income increased 5.7% year on year, to ¥17.5 billion.
Compared with the initial forecast for the interim period, which was released on April 28 this year, net sales were slightly below the forecast figure, but operating profit showed improvement as a result of foreign exchange gains along with the increase in the value of the euro, an improvement in the gross margin on sales, and other factors. Recurring profit and interim net income were above forecast owing to an increase in equity in earnings of affiliates and other factors. |
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Sales and Operating Profit by Segment
(Figures in parentheses are changes from the same period of the previous fiscal year unless otherwise indicated.) |
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Musical Instruments
Sales of ¥157.4 billion (+4.4%) and Operating Income of ¥11.0 billion (+35.9%)
Although sales of pianos were steady in Europe and in China and other markets in Asia (outside Japan), overall sales of pianos were about the same as for the interim period because of the adverse effect of weak conditions in the North American and the Japanese markets. Among sales of electronic musical instruments, sales of Electone™ products continued to decline in Japan, but sales of portable keyboards and other electronic musical instruments in overseas markets continued firm, and a substantial rise in revenues was reported in professional audio equipment. Overall sales of wind instruments, music schools and English language schools were steady, and the musical instruments segment as a whole reported an increase in sales year on year. Operating income expanded year on year as a result of the increase in sales, foreign exchange gains, and other factors.
AV/IT Products
Sales of ¥34.9 billion (–1.7%) and Operating Income of ¥700 million (+5.3%)
In audio products, overall sales expanded, supported by growth in sales of AV receivers, one of the principal products in this business, in the North American market. In addition, sales of digital sound projectors also increased but revenues from commercial karaoke equipment declined. As a result, this segment reported a slight decline in sales and operating income was virtually level with the interim period of the previous year.
Electronic Equipment and Metal Products
Sales of ¥27.5 billion (–2.8%) and Operating Income of ¥2.2 billion (–56.1%)
In the electronic metal products area, sales of electronic metal products rose accompanying the rise in materials prices. Sales of electronic equipment declined because of a decrease in demand for LSI sound chips for mobile phones. Sales in this segment as a whole showed a slight decline. Operating income posted another sharp decline because of the decrease in sales and profit margins on semiconductors.
Lifestyle-Related Products
Sales of ¥22.5 billion (–0.7%) and Operating Income of ¥400 million (–58.6%)
Sales of system kitchens expanded, supported by growth sales of system kitchens equipped with sinks made of artificial marble, but revenues from system baths declined due to more intense market competition and lower prices, resulting in a slight decrease year on year in sales for the segment as a whole. Operating income fell as a result of the decline in gross profit and the increase in selling, general and administrative costs.
Recreation
Sales of ¥9.0 billion (+0.9%) and an Operating Loss of ¥600 million (versus an operating loss of ¥660 million in the same period of the previous fiscal year)
Although sales from wedding-related operations declined, this segment’s overall sales rose slightly, supported by an increase in the number of customers visiting the segment’s one-day outing facilities. The operating loss decreased slightly because of lower selling, general and administrative costs, principally accounted for by lower depreciation.
Other
Sales of ¥13.3 billion (+19.8%) and Operating Income of ¥90 million (versus an operating profit of ¥140 million in the previous year)
Although sales of automobile interior wood components were at about the same level as for the interim period of the previous fiscal year. Sales of golf products increased, despite continued difficult operating conditions in the domestic market, because of an expansion in exports. In the metallic mold and parts business, sales of magnesium parts and metallic molds expanded, leading to higher revenues. Overall segment sales increased, but operating income showed a slight decline year on year.
Non-Consolidated Performance
On a non-consolidated accounting basis, Yamaha Corporation reported sales of ¥169.7 billion (–0.3%), almost the same as previously forecast, operating income of ¥10.5 billion (+11.4%), recurring profit of ¥13.2 billion (+2.5%), and interim net income of ¥9.0 billion (–1.3%). This reflected increased operating income of the musical instruments business, owing to the gain from foreign exchange, and the decrease in selling, general and administrative expenses.
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| Outlook for the Full Fiscal Year––Revision of the Forecast Released on April 28 |
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Yamaha has revised its forecast for the full fiscal year ending March 31, 2007, released on April 28, 2006, taking into account the results for the interim period and anticipated future trends. The original forecast, on a consolidated basis, was for net sales of ¥546.0 billion, operating income of ¥25.0 billion, recurring profit of ¥35.0 billion, and net income of ¥28.0 billion. Under the revised forecast, Yamaha is now anticipating recurring profit of ¥38.0 billion, and net income of ¥29.0 billion because of an anticipated increase in equity in earnings of affliates. Yamaha also expects net sales of ¥546.0 billion and operating income of ¥25.0 billion, the same as the previous forecast. On a non-consolidated basis, in its forecast released on April 28, Yamaha looked for sales of ¥323.0 billion, operating income of ¥6.5 billion, recurring profit of ¥10.0 billion, and net income of ¥7.0 billion. The new forecast calls for sales of ¥320.0 billion, operating income of ¥10.0 billion, recurring profit of ¥16.0 billion, and net income of ¥11.0 billion.
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| Note: Figures in the text have been rounded to the nearest million or billion. |
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For further information, please contact
Yamaha Corporation
Public & Investor Relations Group,
Public Relations Division
17-11, Takanawa 2-chome, Minato-ku,
Tokyo 108-8568, Japan
TEL. +81-3-5488-6601
FAX. +81-3-5488-5060
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Consolidated Basis