Hitachi Ltd. on Friday reported a 68 percent decline in group net profit in the April-December period from a year earlier, with the firm primarily attributing the fall to its subsidiary’s suspension of a nuclear power plant project in the United Kingdom.
The Japanese electronics giant said net profit sagged to ¥82.6 billion for the nine months, down from ¥258.58 billion for the same period the previous year, due to a special loss attributed to the project.
The firm also slashed its net profit projection for the full year through March by 50 percent compared with the previous fiscal year, to ¥180 billion.
The disappointing results reflect the Jan. 17 announcement that Horizon Nuclear Power Ltd., a Hitachi subsidiary, and the U.K. government reached an impasse over funding for the ¥3 trillion project. Hitachi Chairman Hiroaki Nakanishi was previously quoted as saying that “nationalization is the only path” toward resuming the suspended project in Wales.
As for its business in China, Hitachi Chief Financial Officer Mitsuaki Nishiyama mentioned a “mixed” performance. While the company saw an increase in demand for elevators, its automotive sales were down, he said.
He added that even though trade frictions between China and the United States had a limited impact on the company’s business, he is worried about wider effects on the nation’s economy.
“This matter is something we need to monitor closely,” he said at a news conference.
Despite the financial setback, the company did announce some bright spots. During the nine-month period, the firm’s revenue went up by 1.6 percent to ¥6.78 trillion, and operating profit rose 12.6 percent to ¥534.54 billion.
Nishiyama cited increases in construction machinery orders in the Asia-Pacific region and North America, as well as strong sales of railway systems in Europe, as factors contributing to the revenue increase.
Referring to Brexit, Nishiyama said that while uncertainties remain, the company has still seen strong demand for railway systems in the country.
Hitachi announced in December that it had reached a deal with a Swiss engineering group ABB Ltd. to purchase a majority stake in its power grid division, its biggest-ever acquisition.