NEC to Boost Profit By More Use of Group Firms’ Products: Pres.

Tokyo, July 4 (Jiji Press)–NEC Corp. aims to improve group operating profit by 40 billion yen in and after fiscal 2006 by using more of software and parts made by group firms, President Akinobu Kanasugi said Monday.

For fiscal 2005 to March 2006, NEC estimates group operating profit at 150 billion yen under U.S. accounting rules and expects further profit expansion in the years ahead through greater procurement from group companies, Kanasugi told reporters.

Of overall group sales of 5 trillion yen, the sales to companies outside the group now come to 3 trillion yen, according to NEC.

Asked about mobile phone operations, Kanasugi said NEC hopes to expand sales not only in China but also Europe, albeit at a measured pace. NEC is on course to regain profitability from such operations in the current business year, he added.

NEC hopes to raise sales in China to three million units in fiscal 2005 from two million units in fiscal 2004.

Currently, NEC is not considering discontinuing its personal computer operations, he said, pointing to a low operational profit ratio but a high level of return on investment.END