Denso Corporation boosted sales 12.9% year on year to 1,701.7bn yen (US$14.4bn) and operating income 15.5% to 138.3bn yen ($1.2bn) in the first half of its fiscal year ended 30 September.
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Income before taxes rose 23.6% to 147.4bn yen and net income was up 40% to 94.1bn yen.
“The increase in domestic and overseas car production for Japanese auto manufacturers contributed to the sales growth,” said managing officer Koji Kobayashi.
“In spite of the increasing costs in raw materials, such as copper and aluminium, the operating income increased due to increased production volume, cost reduction efforts and the depreciated yen.”
In Japan, sales totaled 1,210.8bn yen, a 12.0% increase from the previous year, and operating income was up 6.1% to 97.8bn yen.Robust domestic car production supported by growing export contributed to the increase in sales. The combination of increased production volume, cost reduction efforts and foreign exchange gain absorbed the increase in raw material costs and resulted in an increase in operating income.
In North, Central and South America, combined sales rose 13.4% to 371.0bn yen. Despite the decrease in car production for Japanese auto manufacturers in North America, sales expansion to GM and Toyota contributed to the increase of sales. Operating income increased 15.1% to 13.6bn yen due to increased production volume and cost reductions.
In Europe, Ford sales expansion and increased compact car production, such as by Fiat, raised sales 21.6% to 238.8bn yen while operating income improved from a loss of 0.8bn yen in the previous year to a gain of 5.1bn yen due to an increase in production volume in the Czech Republic, Hungary and Italy.
In Asia and Oceania, sales were up 18.7% to 218.0bn yen and operating income rose 29.9% to 21.4bn yen. Increased car production in China, Korea and Thailand resulted in an increase in sales, and the production volume increase and cost reduction efforts contributed to the increase in operating income.
“As a result of our good financial results in this interim period, we have revised and raised our fiscal year 2006 estimate announced on April 27, 2006,” noted Kobayashi.
The company has boosted the net sales forecast 9.8% to 3,500.0bn yen and operating income 8% to 288.0bn yen. Net income is now pegged at 193.0bn yen, a 13.8% increase on the previous forecast.
