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Pioneer Announces Business Results for 3Q Fiscal 2012

February 9, 2012

Tokyo, Feb 9, 2012 – (JCN Newswire) – Pioneer Corporation today announced its consolidated third-quarter and nine-month
business results for the periods ended December 31, 2011.

Consolidated Financial Highlights
------------------------------------------------------------------------
                       (In millions of yen except per share information)
                              Three months             Nine months
                            ended December 31       ended December 31
                         2011   2010   Percent    2011   2010   Percent
                                       change                   change
Net sales               101,829 117,035 -13%     315,558 343,716  -8.2%
Operating income (loss) (1,707) 5,060     -        5,295  11,729 -54.9%
Ordinary income (loss)  (2,650) 3,770     -        2,421   9,224 -73.8%
Net income (loss)       (8,078) 2,668     -       (6,573) 10,322    -
------------------------------------------------------------------------
Net income (loss) per
share                   (25.16) 8.31              (20.47)  32.15
>

Consolidated Business Results

For the third quarter of fiscal 2012, the three months ended December 31, 2011, consolidated net sales declined 13.0% from the third quarter of fiscal 2011, to 101,829 million yen. Although sales of car navigation systems grew, large declines in sales of optical disc drive-related products, due to the absence of the previous year’s special demand associated with the shift to digital terrestrial broadcasting in Japan, and in sales of car audio products because of the flooding in Thailand, coupled with the negative impact of the Japanese yen’s appreciation, resulted in an overall decline.

Operating income fell to a 1,707 million yen loss, from a 5,060 million yen profit for the third quarter of fiscal 2011, owing to deterioration in the gross profit margin and lower sales due to the flooding in Thailand. In addition to this decline in operating income, Pioneer recorded a 3,791 million yen extraordinary loss in connection with the introduction of a defined contribution pension plan. As a consequence, net income fell, resulting in a loss of 8,078 million yen, compared with a 2,668 million yen profit in the third quarter of fiscal 2011.

During the third quarter of fiscal 2012, the average value of the Japanese yen appreciated 6.8% against the U.S. dollar and 7.6% against the euro, compared with the third quarter of fiscal 2011.

Car Electronics sales decreased 5.7% year on year, to 58,406 million yen, reflecting the impact of the flooding in Thailand and the Japanese yen’s appreciation. Sales of car navigation systems grew, with strong OEM sales of products for dealer options in Japan more than offsetting a decline in consumer-market sales primarily in Japan. Car audio products recorded lower sales, owing to lower sales in consumer markets, principally in Central and South America, and in North America, resulting from the insufficient supply of products caused by decreased production stemming from the flooding in Thailand. OEM sales of car audio products also declined, primarily in China and Japan, part of which was offset by an increase in North America. OEM sales accounted for 49% of total Car Electronics sales, compared with 44% in the third quarter of fiscal 2011.

By geographic region, sales in Japan increased 9.6%, to 29,676 million yen, while overseas sales declined 17.6%, to 28,730 million yen.

With a weaker gross profit margin and the decline in sales due to the flooding in Thailand, operating income in this segment fell, resulting in a loss of 2,251 million yen, compared with a 3,990 million yen profit in the third quarter of fiscal 2011.

Home Electronics sales declined 25.5% year on year, to 33,313 million yen. Despite favorable sales of AV receivers in Europe and North America, there was a large drop-off in sales of optical disc drive-related products and cable-TV set-top boxes, mostly reflecting the absence of the previous year’s special demand associated with the shift to digital terrestrial broadcasting in Japan.

By geographic region, sales in Japan declined 40.3%, to 16,057 million yen, and overseas sales declined 3.3%, to 17,256 million yen.

Despite a decline in selling, general and administrative (SG&A) expenses, operating income in this segment declined 87.1% from the third quarter of fiscal 2011, to 224 million yen, because of lower sales.

In the Others segment, sales decreased 2.1% year on year, to 10,110 million yen, on lower sales of organic light-emitting diode displays and electronic devices and parts, despite increased sales of map software and factory automation systems.

By geographic region, sales in Japan grew 10.6%, to 7,276 million yen, while overseas sales declined 24.4%, to 2,834 million yen.

Although the gross profit margin weakened, reductions in SG&A expenses resulted in an improvement in the operating loss in this segment, to 189 million yen, compared with a 365 million yen loss in the third quarter of fiscal 2011.

For the nine months ended December 31, 2011, consolidated net sales declined 8.2% year on year, to 315,558 million yen. Despite strong sales of car navigation systems in Japan, significantly lower sales of optical disc drive-related products due to the absence of the previous year’s special demand associated with the shift to digital terrestrial broadcasting in Japan and a decline in sales of disc drives for PCs, and of car audio products from the impact of the Great East Japan Earthquake and the flooding in Thailand, combined with the Japanese yen’s appreciation, resulted in an overall decline.

Despite a reduction in SG&A expenses, operating income declined 54.9% year on year, to 5,295 million yen, on lower sales and a weaker gross profit margin due to the impact of the Great East Japan Earthquake and the flooding in Thailand. At the net income level, in addition to the decline in operating income and the recording of a 3,920 million yen extraordinary loss from the introduction of a defined contribution pension plan, a gain on sale of property, plant and equipment was recorded in the corresponding period of the previous fiscal year from the sale of the Company’s former Head Office and other assets. As a result, net income fell to a 6,573 million yen loss, compared with a 10,322 million yen profit in the corresponding period of fiscal 2011.

During the nine months ended December 31, 2011, the average value of the Japanese yen appreciated 9.9% against the U.S. dollar and 2.4% against the euro, compared with the corresponding period of the previous fiscal year.

Consolidated Financial Position

Total assets as of December 31, 2011 were 291,988 million yen, a decrease of 17,724 million yen from March 31, 2011. Although inventories grew, decreases in property, plant and equipment, trade receivables, and cash and deposits resulted in an overall decline. Inventories grew 4,239 million yen, to 63,855 million yen, as production was shifted to alternate facilities in response to the flooding in Thailand. On the other hand, property, plant and equipment decreased 9,369 million yen, to 58,035 million yen, from restrained capital expenditures and sales of idle assets. Trade receivables declined 7,425 million yen , to 57,822 million yen, reflecting lower sales and the Japanese yen’s appreciation. Cash and deposits decreased 6,741 million yen, to 40,825 million yen.

Total liabilities as of December 31, 2011 were 217,086 million yen, a decrease of 4,172 million yen from March 31, 2011. Although borrowings increased 5,369 million yen and accrued pension and severance costs rose 4,095 million yen from changes in the pension plan, trade payables declined 6,942 million yen from a decrease in the purchase amounts and the negative impact of the Japanese yen’s appreciation, and accrued expenses decreased 4,258 million yen.

Total equity as of December 31, 2011 was 74,902 million yen, a decrease of 13,552 million yen from March 31, 2011, mainly reflecting the recording of a 6,573 million yen net loss, and a 6,389 million yen reduction in foreign currency translation adjustments from the Japanese yen’s appreciation.

Cash Flows

During the nine months ended December 31, 2011, net cash provided by operating activities was 2,541 million yen, a 20,955 million yen decrease from the nine months ended December 31, 2010. This was mainly due to the fact that trade payables decreased 3,977 million yen, compared with a 13,177 million yen increase in the year-earlier period, in addition to a decline in income before income taxes and minority interests, to a 2,671 million yen loss, compared with a year-earlier 14,550 million yen profit.

Net cash used in investing activities grew 12,515 million yen, compared with the year-earlier period, to 13,933 million yen. This was primarily the result of a 10,868 million yen decline in proceeds from the sale of noncurrent assets, and the absence of 1,725 million yen in proceeds from the sale of investment securities in the year-earlier period.

Financing activities provided net cash in the amount of 5,787 million yen, compared with a 6,549 million yen net outflow in the year-earlier period. This was mainly because of a 5,570 million yen increase in long-term and short-term borrowings, compared with the year-earlier period decrease of 6,266 million yen.

Cash and cash equivalents denominated in foreign currencies declined 1,542 million yen from March 31, 2011 when converted to Japanese yen, reflecting the yen’s appreciation.

As a result, cash and cash equivalents as of December 31, 2011 were 40,419 million yen, a decrease of 7,147 million yen from March 31, 2011.

Business Forecasts for Fiscal 2012

Consolidated business forecasts for fiscal 2012, ending March 31, 2012, have not been changed from those announced on November 29, 2011.

                                                  (In millions of yen)
                               Forecasts for     Results for     Percent
                                fiscal 2012      fiscal 2011     change
Net sales                         440,000          457,545       -3.8%
Operating income                   11,000           15,817      -30.5%
Ordinary income                     7,500           12,331      -39.2%
Net income                          1,000           10,350      -90.3%
>

The yen-U.S. dollar exchange rate assumption for the fourth quarter remains unchanged at 75 yen, while the yen-euro exchange rate assumption is 100 yen, 5 yen stronger than before.

About Pioneer

Pioneer Corporation is a leading global manufacturer of consumer and business-use electronics products such as audio, video and car electronics. Its shares are traded on the Tokyo Stock Exchange (TSE: 6773). For more information , please visit http://pioneer.jp .

Source: Pioneer

Contact:

Investor Relations Department, Corporate Communications Division
Pioneer Corporation, Japan
Phone: +81-44-580-1004
Fax: +81-44-580-4064
E-mail: pioneer_ir@post.pioneer.co.jp
IR Website: http://pioneer.jp/ir-e/>

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Source: acnnewswire



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