DENSO Announces First-quarter Financial Results

DENSO Announces First-quarter Financial Results

KARIYA (Japan) ―DENSO Corporation today announced global financial results for the first quarter ending June 30, 2011:

Consolidated net sales totaled 630.2 billion yen (US$7.8 billion), a 21.5 percent decrease from the previous year.

Consolidated operating loss totaled 4.4 billion yen (US$54.2 million), a decrease of 75.0 billion yen (US$929.4 million) from the previous year’s operating income of 70.7 billion yen (US$875.2 million).

Consolidated net income totaled 2.6 billion yen (US$32.0 million), a 94.4 percent decrease from the previous year.

”Due to the Great East Japan Earthquake, production level was considerably low in April and May. However, it has rapidly recovered since June and now overall production is close to pre-quake levels,” said Sadahiro Usui, executive director of DENSO Corporation. “A significant decrease in car production and a temporary cost increase to comply with the affects of the earthquake led to a decrease in sales from the previous year and an operating loss.”

In Japan, the significant decrease in car production due to the Great East Japan Earthquake led to a decrease in sales to 398.8 billion yen (US$4.9 billion), a 24.7 percent decrease from the previous year. Decreases in production volume resulted in an operating loss of 24.4 billion yen (US$302.4 million), a decrease of 57.7 billion yen (US$714.7 million) from the previous year’s operating income.

In North America, despite a sales increase to Ford, decreases in Japanese auto manufacturers’ production led to a decrease in sales to 101.1 billion yen (US$1.3 billion), a 30.0 percent decrease from the previous year. As a result of the decrease in production volume, the operating loss totaled 2.5 billion yen (US$31.4 million), a decrease of 10.1 billion yen (US$125.0 million) from the previous year’s operating income.

In Europe, an increase in sales mainly to European auto manufactures led to an increase in sales to 108.6 billion yen (US$1.3 billion), a 4.0 percent increase from the previous year. Operating income totaled 3.2 billion yen (US$39.2 million), an 11.7 percent decrease from the previous year.

In Asia and Oceania, despite a sales increase to Hyundai Kia Automotive Group, a decrease in Japanese auto manufactures’ car production resulted in sales decrease to 147.3 billion yen (US$1.8 billion), a 10.2 percent decrease from the previous year. A decrease in production volume led to the operating income of 13.3 billion yen (US$164.9 million), a 48.2 percent decrease from the previous year.

In other areas, which mainly applies to the South American region, including countries such as Brazil and Argentina, sales totaled 15.8 billion yen (US$195.4 million), a 2.0 percent increase from the previous year, and operating income totaled 1.5 billion yen (US$18.9 million), a 17.1 percent decrease from the previous year.

“Considering the strong recovery from the earthquake, we have decided to upwardly revise the original forecasts for the first-half financial results,” said Usui. “The dividend for the fiscal year ending March 31, 2012, is undecided, but we will announce the forecast as soon as possible.

“Despite the harsh business environment such as strong yen and rising raw materials cost, we will strive to make recovery in our financial results through reducing cost and improving productivity,“ added Usui.

DENSO Corporation, headquartered in Kariya, Aichi prefecture, Japan, is a leading global automotive supplier of advanced technology, systems and components in the areas of thermal, powertrain control, electric, electronics and information and safety. Its customers include all the world’s major carmakers. Worldwide, the company has more than 200 subsidiaries and affiliates in 35 countries and regions (including Japan) and employs approximately 120,000 people.

Last fiscal year, DENSO spent 9.3 percent of its global consolidated sales on research and development. DENSO common stock is traded on the Tokyo and Nagoya stock exchanges. For more information, go to www.globaldenso.com, or visit our media website at www.densomediacenter.com.

(Notes)

The above forecasts are created based on the information obtained by the date of this announcement and the actual results may differ due to various causes in the future.

U.S. dollar amounts have been translated, for convenience only, at the rate of 80.73 yen = US$1, the approximate exchange rate prevailing in the Tokyo Foreign Exchange Market on June 30, 2011. Billion is used in the American sense of one thousand million.