Consolidated financial results for the six months ended September 30, 2012 recorded net sales of 1,104.1 billion yen, operating loss of 168.8 billion yen, and net loss of 387.5 billion yen.
As for net sales, we were able to achieve the previous forecast that we announced on August 2, 2012. Operating loss and net loss for the six months, however, were larger than the previous forecast, due mainly to the recording of additional expenses related to the business restructuring that is currently underway. Otherwise, the losses would have been within the previous forecast range.
With regard to net sales, we were able to achieve the previous forecast, both for individual product groups and overall.
In fact, net sales between the first and the second quarters showed an increase in all product groups except Health and Environmental Equipment, where they remained almost the same. As a result, net sales as a whole were up 40% from the first quarter. For the second quarter, net sales—which hit bottom in the first quarter of fiscal 2012—have recovered to the level recorded in the first or second quarters of fiscal 2011.
In terms of profit, we have been able to obtain results almost in line with forecasts. In order to improve the profitability going forward, we have carried out supplementary measures to compress our assets, including noncurrent assets and inventory, by 175.4 billion yen as part of our business restructuring. The details are as follows.
We recorded an inventory write-down of 30.0 billion yen at the operating income level. The write-down consisted mainly of:
-12.0 billion yen in conventional small- and medium-size LCDs
-18.0 billion yen in conventional devices in Other Electronic Devices
At the same time, we posted 84.4 billion yen as restructuring charges in Other Expenses. This consisted mainly of:
-53.4 billion yen inventory write-down incurred as a result of restructuring large-size LCDs
-30.1 billion yen impairment loss incurred by production facilities in Solar Cells and Other Electronic Devices
Due to the posting of these additional expenses, we have recorded a reversal of deferred tax assets of 61.0 billion yen.
However, they are non-cash charges and do not have any impact on our cash flows.
Operating loss was larger than the previous forecast by 38.8 billion yen. This is because operating loss of the Electronic Components segment widened unexpectedly, while operating income of Health and Environmental Equipment exceeded the previous forecast. The main factor in the shortfall is an inventory write-down of 30.0 billion yen in LCDs and Other Electronic Devices.
The overall operating loss of 74.7 billion yen in the second quarter improved by 19.4 billion yen from the first quarter. When disregarding inventory write-down, the loss was 44.7 billion yen, which was an improvement of 49.4 billion yen from the first quarter.
The most pronounced factor of the losses in the second quarter is “recording of restructuring charges” and a “reversal of deferred tax assets”.
Through these efforts, we have been able to reduce inventory to 325.7 billion yen at the end of September 2012, down by approximately 200 billion yen from the figure of 527.4 billion yen at the end of March 2012. Inventory ratio against monthly turnover improved to 1.77 months from 2.58 months.
Furthermore, with a reduction in inventory, write-down of plant & equipment, and making off-balance-sheet arrangements for the Sakai Plant, we were able to reduce total assets to 2,220.4 billion yen, down by approximately 390 billion yen from the 2,614.1 billion yen recorded at the end of March 2012.