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Amid this harsh environment, the Kyocera Group continued to pursue synergies by optimizing management resources and aggressively releasing new products while promoting comprehensive Group-wide cost reduction. Nonetheless, profit from operations for fiscal 2009 decreased by 71.5% compared with fiscal 2008, to 43,419 million yen ($443 million), due mainly to decreased demand and price erosion. Income before income taxes decreased by 68.0%, to 55,982 million yen ($571 million), due to the decrease in profit from operations. Net income decreased by 72.5% to 29,506 million yen ($301 million).
Average exchange rates for fiscal 2009 were 101 yen to the U.S. dollar and 143 yen to the euro, representing appreciation of 13 and 19 yen, respectively, compared with fiscal 2008. For calculation purposes, this fluctuation in currency exchange rates served to reduce net sales by approximately 91.0 billion yen ($929 million), and income before income taxes by 23.0 billion yen ($235 million), compared to fiscal 2008.
In the components segment, fiscal 2009 sales decreased by 15.1%, to 577,055 million yen ($5,888 million), and operating profit decreased by 68.3%, to 31,830 million yen ($325 million), compared with fiscal 2008. In the equipment segment, fiscal 2009 sales decreased by 10.0%, to 448,055 million yen ($4,572 million), and operating profit decreased by 50,540 million yen ($516 million) to a loss of 4,216 million yen ($43 million), compared with fiscal 2008.
The “Others” segment includes various information and communications technology services, as well as materials for electronic components. Sales in this reporting segment for fiscal 2009 decreased by 9.0% compared with fiscal 2008, to 126,043 million yen ($1,286 million), due primarily to a decrease in sales of materials for electronic components. Despite a write-down of goodwill in a certain subsidiary, operating profit increased by 46.4% compared with fiscal 2008, to 14,106 million yen ($144 million), due to one-time gains on sales of certain real estate in Japan and other regions.
Economic conditions remain uncertain for the foreseeable future, and recovery is expected to be a gradual process as economic stimulus efforts and monetary policy adjustments take effect. Demand for digital consumer equipment remains slow; with respect to exchange rates, which constitute the basis of the corporate performance forecast, the yen is expected to appreciate further against both the U.S. dollar and the euro. Accordingly, the business environment surrounding the Kyocera Group in fiscal 2010 is expected to be severe.
In the components segment, certain products are showing signs of recovery in demand on a consolidated basis relative to the fourth quarter of fiscal 2009; however, a trend is not yet conclusive. With respect to the equipment segment, the slowdown in replacement demand for mobile phone handsets is expected to continue in the U.S. and Japan. Information technology (IT) investment by corporations is also expected to remain weak.
Based on this forecast of market conditions, Kyocera anticipates a reduction in consolidated sales for fiscal 2010 as compared to fiscal 2009. Under these circumstances, the Kyocera Group as a whole will execute all-out cost cutting and reduced capital investment. Kyocera will aim to achieve a more highly profitable structure as quickly as possible by expanding its business in information technology, communications, environmental preservation and energy.
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