Denso Profit Rises as Currency Factors Stall Revenue

Denso Corp. reports its net profit grew 6% to 258 billion yen ($2.3 billion) in the fiscal year ended March 31.

Unfavorable exchange rates left the company’s revenue for the period flat at 4.5 trillion yen ($40.4 billion). Operating profit rose 5% to 331 billion yen ($2.9 billion), thanks to cost reductions and greater production volume.

In Japan, Denso’s revenue in fiscal 2016-2017 advanced 2% to 2.7 trillion yen ($4 billion). But operating profit plunged 16% to 130 billion yen ($1.2 billion).

In North America, currency effects caused a 3% drop to 1.1 trillion yen ($9.6 billion) in spite of the region’s greater production volume. Operating profit plummeted 26% to 60 billion yen ($534 million). Exchange rates also took a toll in Europe. Revenue slipped 3% to 577 billion yen ($5.1 billion). But greater production and sales growth for the company hiked operating profits 40% to 20 billion yen ($180 million).

In Asia, revenue for the 12-month period declined 2% to 1.2 trillion yen ($10.2 billion). But operating profit climbed 17% to 113 billion yen ($1.0 billion).

Denso predicts more of the same for the fiscal year that began April 1. The company expects revenue will expand 2% to 4.6 trillion yen. It says operating profit will dip 1% to 327 billion yen, and net profit will improve about 1% to 260 billion yen.