Denso forecasts profit growth on higher Asia sales
TOKYO (Reuters) — Japan’s Denso Corp., the world’s second-biggest auto supplier based on revenue, forecast a 7 percent rise in operating profit for the year ahead, citing an anticipated rise in Asian sales.
Denso, an affiliate of Toyota Motor Corp, said on Tuesday it expected operating profit of 380 billion yen ($3.19 billion) for the year through next March.
The expected rise in operating profit follows a 6 percent drop in the just-ended year to 355.1 billion yen, as higher labor and depreciation costs outweighed currency-related gains. But Denso’s net income still grew 2 percent to $293.1 billion yen ($2.4 billion).
The company said its total revenue for the fiscal year grew 5.2 percent to 4,308 billion yen ($35.9 billion).
“Denso’s sales increased due to an overseas production volume increase,” Denso CEO Nobuaki Katoh said in a statement. “However, despite cost reduction efforts, an increase in production volume, r&d expenditures, and investment costs to strengthen future growth, there was a decrease in operating income.”