Denso has announced financial results for the fiscal year ending March 31 that show operating profit almost 25% ahead of the previous year on revenues 13% higher. However, adverse currency effects (yen appreciation versus the dollar) are forecast to dent operating profit in the current fiscal year.

Consolidated revenue totalled 5,108.3 billion yen (US$48.1 billion), a 12.8% increase from the previous year. Consolidated operating profit totalled 412.7 billion yen (US$3.9 billion), a 24.8% increase from the previous year.

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"Denso's revenue rose due to an increase in vehicle production, as well as sales expansion. Denso's operating profit also saw an increase due to a rise in production volume and company cost reduction efforts," said Koji Arima, president and CEO of Denso.

In Japan, a rise in vehicle production and newly consolidated subsidiaries resulted in an increase in revenue to 3,083.8 billion yen (US$29.0 billion), 14.8% up on the previous year. As a result of the increase in production volume and cost reduction efforts, the operating profit in Japan totalled 200.7 billion yen (US$1.9 billion), a 54.2% improvement from the previous year.

In North America, sales expansion led to a rise in revenue to 1,156.3 billion yen (US$10.9 billion), a 7.3% increase from the previous year. Operating profit in NA totalled 42.5 billion yen (US$0.4 billion), a 29.1% decrease from the previous year due to currency effects.

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In Europe, a rise in both vehicle production and sales expansion led to an increase in revenue to 662.3 billion yen (US$6.2 billion), a 14.7% increase from the previous year. Due to depreciation increases, operating profit dropped to 20.1 billion yen (US$0.2 billion), a 0.5% decrease from the previous year.

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In Asia, an increase in both vehicle production and sales expansion resulted in an increase in revenue to 1,322.8 billion yen (US$12.5 billion), a 16.1% rise from the previous year. As a result of the increase in production volume, operating profit totalled 136.7 billion yen (US$1.3 billion), 21.3% growth from the previous year.

In other areas, mainly the South American region, including Brazil and Argentina, revenue totalled 79.0 billion yen (US$0.7 billion), a 20.0 percent increase from the previous year. Operating profit totalled 13.4 billion yen (US$0.1 billion).

Operating profit forecast to fall this year

"For the new fiscal year, revenue will increase due to the increase in car production, sales expansion, and the newly consolidated subsidiaries. Despite a rise in production volume and cost reduction efforts, operating profit will decrease due to an increase in investment for future growth, in addition to the impact of the yen's appreciation and increase of material costs," said Arima.