Denso Corporation has boosted operating income 3.3% year on year to JPY89.1bn ($US748m) for its fiscal third quarter ended 31 December 2006.

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Consolidated net sales rose 14.7% to JPY927.9bn ($7.8bn), income before income taxes and minority interests was up 4.4% to JPY97.6bn ($819.4m) and consolidated net income rose 9% to JPY61.7bn ($518.0m).


“The sales growth was due to the increase in domestic and overseas car production for Japanese auto manufacturers,” said Denso Corporation managing officer Koji Kobayashi. “In spite of rising raw material costs, increased production volume and cost reduction efforts led to an increase in operating income.”


In Japan, sales were up 13% to JPY665.5bn ($5.6bn) due to “robust” domestic car production supported by growing exports. However, despite production volume increases, operating income dipped 0.4% to JPY70.3bn ($590.2m) due to increases in raw material costs.


In North, Central and South America, increased production for Toyota, Honda and General Motors boosted sales 8.1% to JPY185.2bn ($1.6bn) while operating income increased 32% to JPY5.6bn ($47.0m).

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Increased production volume and cost reduction efforts absorbed the increase in raw material costs and resulted in an increase in the operating income rise.


In Europe, more production for Toyota, Ford and General Motors raised sales 25.6% to JPY132.5bn ($1.1bn) and operating income increased to JPY3.3bn ($ 27.7m) from JPY0.9bn ($ 7.6m) in the previous year, as a result of an increase in production volume in the Czech Republic and Hungary.


In Asia and Oceania, sales rose 17.8% to JPY123.6bn ($1.0bn) thanks to increased car production in China.


Although production volume increased, operating income dropped 1% to JPY11.8bn ($99.1m) due to start-up costs in China.


No changes were made to the full-year forecasts announced last 31 October. For the fiscal year ending 31 March 2007, Denso is expecting net income of JPY193bn on sales of JPY3,500bn. Income before taxes and minority interests is forecast to be JPY301.8bn.