Backed by brisk earnings in 2006, a senior executive at Pentax Corp. said Friday the firm was confident it could go it alone without Hoya Corp.
“We are confident that we can compete on our own. We wonder why we should go under the umbrella” of Hoya, Pentax Managing Director Shinichiro Mitsuhashi told a news conference to announce the camera maker’s financial results for the business year to March 31.
Pentax said its net profit more than quadrupled over the previous year to 3.57 billion yen thanks to strong demand for its digital single-lens reflex cameras.
Operating profit jumped 89.4 percent year-on-year to 5.65 billion yen on record sales of 157.3 billion yen. Net profit and operating profit were at their second-highest level, the firm said.
The domestic market for expensive digital SLR cameras has been expanding. Mitsuhashi noted that Pentax is one of the few domestic camera makers that manufactures digital SLRs.
“In line with the start of the retirement of baby boomers, the popularity of digital cameras shifted from cheap cameras to high-quality authentic cameras,” he said.
Mitsuhashi said Pentax may still try to find another partner to tie up with after June if shareholders felt its new midterm business plan, announced the same day, was not sufficient.
Under a basic agreement Pentax signed with Hoya in December, the camera maker is not allowed to enter into alliance talks with another company until June 1.
Pentax, which scrapped a proposed merger with Hoya in April, has been under pressure from its largest shareholder, Sparx Group Co., a Tokyo-based asset management firm, to present an alternative to boost its corporate value.
All eyes are on Sparx to see if it will approve of Pentax’s three-year business plan, which is short on specifics.
Hoya has given up trying to merge with Pentax and now is proposing to make a takeover bid, offering 770 yen per share, but Pentax has not decided to accept the offer.
Under the business plan, which covers until March 2010, Pentax aims to double its operating profit to 11.2 billion yen for its 2009 business year from 2006 and boosting its sales by 21 percent to 191 billion yen in 2009.
The plan focuses mainly on slashing costs by streamlining production and sales channels, exiting unprofitable business and reorganizing head office.
Although some media have reported that Pentax would sell its head-office building in Tokyo’s Itabashi Ward, for an estimated 12 billion yen in profit, it was not in the business plan.
Sparx supported the planned share-swap merger between Pentax and Hoya. After Pentax rejected the merger, Sparx asked Pentax to come up with a plan to enhance its corporate value and agree to Hoya’s tender offer proposal.
But Pentax is reluctant to seek an alliance with Hoya.
“Our corporate culture is totally different from each other. Pentax is a traditional, small factory type of firm while Hoya is an American-style company. I wonder if merging the two companies would be successful,” Mitsuhashi said.
If Pentax’s shares do not surpass the 770 yen per share offered by Hoya, Pentax shareholders are likely to be dissatisfied with the plan. Pentax shares closed at 761 yen Friday on the Tokyo Stock Exchange.
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