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To our Shareholders and Investors
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We wish to begin this report to you as always with our sincere appreciation for your interests and continuing support for our efforts in our business. On March 31, 2010, our 63th fiscal year (April 1, 2009 through March 31, 2010) ended, and I wish to report to you about our activities and financial results during this period.
During the consolidated fiscal year under review, the Japanese economy showed some positive signs, with corporate earnings improving against a backdrop of recovering demand in emerging countries and the effect of the Japanese government stimulus measures. Nonetheless, the economy was still unable to achieve autonomous growth, given weak capital spending in the corporate sector and difficult employment and income environments.
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The electronics industry, where the Marubun Group is positioned, continued to face generally uncertain conditions, although positive indicators emerged, including a substantial increase in shipments of flat-screen TV sets and growth in demand for notebook PCs and smartphones during the term. Meanwhile, the semiconductor market continued to recover, albeit moderately, centering on semiconductors for consumer electronics and PCs.
Under this environment, the Groupfs consolidated net sales for the fiscal year under review rose 4.0% from the previous fiscal year, to 207,948 million yen. Consolidated operating income rose 93.9% from the previous fiscal year, to 2,150 million yen, reflecting efforts to reduce labor costs and expenses.
Consolidated ordinary income increased 1,982.0% from the previous fiscal year, to 1,035 million yen, primarily because of a rise in operating income, which outweighed the posting of an exchange loss of 648 million yen. Consolidated net income for the fiscal year under review stood at 452 million yen (compared with a consolidated net loss of 1,399 million yen for the previous fiscal year), reflecting a decrease of 698 million yen in the business structure improvement expenses and a fall of 559 million yen in the loss on the valuation of investment securities.
Operating results by business segment are as follows.
(Electronic Devices business)
In the Electronic Devices business, although demand for semiconductors for industrial equipment and office automation equipment did not recover in earnest and sales of semiconductors for game consoles fell, demand for LCD panels for TV sets was robust and sales of semiconductors for cellular phone modules and personal computers also increased. As a result, net sales were up 8.7% from the previous fiscal year, to 174,710 million yen, while operating income reached 1,852 million yen.
(Electronic Systems business)
In the Electronic Systems business, sales of medical equipment rose. However, demand for measurement inspection equipment and scientific equipment substantially declined owning to tightened capital spending in the corporate sector, and sales of laser equipment, including optical communications components and laser micro machining equipment, remained weak. As a result, net sales fell 15.1% from the previous fiscal year, to 33,238 million yen. Operating income stood at 311 million yen.
Although the electronics industry, where the Marubun Group is positioned, is expected to grow on the strength of expanding demand in emerging countries, competition for survival is intensifying as price competition in the market for finished goods gathers momentum and business restructuring accelerates.
In this environment, the Group is bolstering its competitive edge by establishing a stable growth base through the expansion of sales of analog semiconductors and the strengthening of the in-vehicle equipment business and the wireless equipment business. We are also developing high value-added products for growth markets such as the environment, medical care and information security. The Group is also taking steps to boost sales and strengthen its earnings capabilities, while seeking to enhance customer satisfaction with an improved ability to propose solutions and bolster its global sales system.
At the same time, the Group is striving to improve corporate quality by providing training for its people, who are the source of its growth, and strengthening its organization. We are also refining our systems of quality control and internal control.
We ask for your continued support, and we will welcome your suggestions.
Yours truly,
May 2010
Akihiko Inamura
Chief Executive Officer
Marubun Corporation
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To our Shareholders and Investors
