Major Japanese power-tool maker Makita Corp. said Wednesday its consolidated pretax profit rose 108.3 percent from a year earlier to 4.42 billion yen in the April-September first half of fiscal 2002 due to increased sales overseas and cuts in production costs.
Announcing the interim group results compiled under U.S. accounting standards, Makita said the improved profitability stemmed mainly from cost cuts resulting from making products at its subsidiary in China.
Group net profit rose 764.2 percent to 3.14 billion yen as expenses related to a transaction between the parent and its U.S. subsidiary were recognized as coming under the “deferred tax assets” accounting privilege.
Makita’s corporate tax bill was thereby held down to 1.6 billion yen as a result of tax refunds. Makita incurred the expenses because the parent remitted money to the U.S. subsidiary, which had racked up a large loss.
Per-share net profit rose to 20.96 yen from 2.37 yen a year earlier, Makita said.
Group sales increased 4.5 percent to 87.65 billion yen, due mainly to increased sales in Europe and Southeast Asia. Overseas sales accounted for 78 percent of the company’s total sales, it added.
For the full year to next March 31, Makita said it expects a consolidated net profit of 4.5 billion yen and pretax profit of 7.6 billion yen on group sales of 173 billion yen.
In the previous year, the company saw a group net profit of 133 million yen and pretax profit of 3.4 billion yen on group sales of 170.53 billion yen.