Denso revenue for the financial year to 31 March, 2019 rose 5% year on year to JPY5,362.8bn. Operating profit fell 23.4% to JPY316.2bn and net profit was off 20.6% to JPY254.5bn.
In Japan, an increase in vehicles equipped with safety-related products, as well as the impact from a newly consolidated subsidiary, resulted in an increase in revenue to JPY3,266.0bn (US$29.4bn), a 5.9% growth from the previous year.
Despite a rise in production volume and cost reduction, operating profit dropped 37.2% to to JPY126bn ($1,135.5m), attributed to investments for future growth, transient profit in the last fiscal year and quality costs.
In North America, a production volume increase and sales expansion led to an increase in revenue to JPY1,212.4bn ($10.9bn), a 4.9% increase from the previous year. Operating profit totaled JPY29.6bn ($266.8m), a 30.3% decrease from the previous year due to the increase in expenses for R&D and the investments for expanding production capabilities.
In Europe, revenue rose 1.5% to JPY652.5bn ($5.9bn), a 1.5% decrease from the previous year. As a result of the increase in cost reduction efforts, operating profit totaled JPY22.8bn ($205.7m), a 13.8% increase.
In Asia, a rise in vehicle production led to a 7.1% increase in revenue to JPY1,416.4bn ($12.8bn), a 7.1% rise. In spite of the increase in production volume and cost reductions, due to impairment of a subsidiary in Korea, operating profit fell 6.1% to JPY128.4bn ($1,157.2m).
In other areas, mainly South America, and specifically Brazil and Argentina, revenue fell 7.9% to JPY72.7bn ($655.4m). Operating profit fell 23.1% to JPY10.3bn ($92.9m).
"Denso's revenue rose in all regions due to an increase in global vehicle production, despite a market slowdown in Europe and China. In addition, the newly consolidated subsidiary, Denso Ten, contributed to the additional growth in revenue," said Koji Arima, president and CEO.
"Operating profit decreased due to the company's increase in investments to help secure its future growth toward becoming a leading advanced mobility supplier. Additionally, transient profit in the last fiscal year and quality cost that were posted in the fourth quarter also attributed to a decrease in profitability.
"For the new fiscal year, revenue and operating profit will increase due to sales expansion of electrification and safety related products," added Arima.