Hitachi Ltd.’s group operating balance may have returned to the black in the April-June quarter of the 2002 business year, according to Hitachi President Etsuhiko Shoyama.
Shoyama told Kyodo News in a recent interview that the firm would “make efforts to return to the black at the operating balance level” in the first three months of the current business year.
Hitachi is set to release its business results for the April-June period in its first quarterly results announcement in late July.
Hitachi had forecast earlier that it was likely to incur an operating loss in the quarter.
During that period, exporters were hurt by the yen’s sharp rise against other major currencies, particularly against the dollar.
The dollar fell to the 119 yen level Friday, compared with the 133 yen level April 1.
“We can offset the effects of the yen’s rise on our profitability thanks to the benefits of measures such as cutbacks in our fixed costs, as long as the yen’s rates (against other currencies) are at present levels,” he said.
Hitachi is assuming that the dollar will average 130 yen during the 2002 business year.
The company has bolstered its defenses against the yen’s appreciation by conducting a series of restructuring programs.
But Shoyama remains concerned over the yen.
“Every 1 yen rise in the value of the yen (against the dollar) removes 3 billion yen from our profits,” he said.
More than half of Hitachi’s electronic components products, such as semiconductor chips, are bound for overseas markets, he said.
“We do not find it desirable for the yen to appreciate sharply,” he remarked.
In closing its books for 2001, Hitachi racked up losses of 325.5 billion yen, largely stemming from its restructuring programs.
These programs will, however, allow the firm to cut its fixed expenses, such as personnel costs, by 240 billion yen in 2002 from the previous year.
Hitachi expects to generate group operating profits of 200 billion yen in 2002, marking a turnaround from the operating losses of 117.4 billion yen it incurred in 2001.
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