Presentation Transcripts

Second quarter net sales in the Machined Components business segment totaled 34.6 billion yen, a 1.5% increase from the previous quarter. Operating income was up 23.9% from the previous quarter to total 8.5 billion yen while the operating margin reached 24.7%, up 4.5 percentage points from the previous quarter.

Sales of ball bearings increased 3.2% from the previous quarter to total 19.3 billion yen. Monthly external shipment volumes have been consistently high. Hovering above 130 million units since April, external shipments hit a record-high 143 million units in September. Demand has also been growing for a variety of different applications, such as fan motors, automobiles, home appliances, office automation equipment, and automated teller machines, and we expect it to remain high for at least another three months or so. The higher production volume has boosted factory utilization, resulting in higher profits and making ball bearings one of our current profit drivers.

Sales performance for our rod-ends and fasteners remained steady in the second quarter due to growing demand for new aircrafts. While sales decreased 1.5% compared to the previous quarter, due mainly to the summer vacation season in Europe and the U.S., profits rose quarter on quarter thanks in part to the weaker Japanese yen. Since the medium-term outlook for aircraft production is bright, we are working hard to fuel growth over the coming years. These efforts include reducing costs via expanded production capacity in Thailand.

The HDD market remained flat during the second quarter mainly due to lagging PC sales. Sales of HDD pivot assemblies was flat from the previous quarter. However steady production brought manufacturing costs down and widened our profit margin.