FINESINTER CO.,LTD Business Report FY2009

Business Highlights

Financial Overview

(in millions of JPY)
  FY2009 FY2008 Rate of
Sales 31,635 34,064 (7.1) -
Operating income 1,433 (878) - -Income increased because the Company made efforts to achieve profitability even when sales were declining. For example, it adjusted its workforce, improved organizational efficiency, curtailed capital investments, reduced inventory, and cut costs.
Ordinary income 1,268 (1,306) -
Net income 1,104 (2,622) -
Powder metallurgy product business
Sales 30,094 32,191 (6.5) -Sales declined due to the slow recovery in demand in the automotive market.
Operating profit 2,531 299 745.6 -Profit increased, as the Company made efforts to return to profitability.

Performance by Region

-Sales in Japan were 27,478 million yen. This was a year-on-year decrease of 1,292 million yen or a 4.5% drop. This resulted even though hybrid cars gained popularity in the auto industry and new car sales volume recovered, thanks to governmental subsidies provided to consumers who purchased green cars.

-Operating income was 1,086 million yen, up 2,930 million yen year-on-year, as the Company made efforts to improve its profitability.

-There were signs of an economic recovery in Thailand and China where governmental economic stimulus initiatives were implemented. Nevertheless, the Company still failed to receive a sufficient amount of business. As a result, sales in Asia declined 704 million yen or 16% year-on-year to 3,687 million yen.
-The Company made cost reduction efforts, but these efforts were only able to partially offset the drop in sales volume. As a result, the Company's operating income drop 395 million yen or 47.5% year-on-year to 436 million yen.

<North America>
-Both emergency and general economic and monetary measures implemented in the U.S. effectively stabilized the U.S. economy and the financial world. In spite of this, sales remained slow at 1,425 million yen, a decrease of 369 million yen year-on-year.
-The Company reported an operating loss of 93 million yen, which was a drop of 223 million yen or 172.2% year-on-year, due to a decline in sales volume.

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)


R&D Expenditures

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 248 286 327
Powder metallurgy product business - - 327

Powder metallurgy product business
-Automotive Components: The Company used to have a Technology Development Center and a  Production Technology Department, which were in charge of R&D for automotive parts. But the Company streamlined its organization in January 2010, integrating these two functions into the new Development, Production and Engineering Department.

-Materials: The Company developed materials that are extremely resistant to friction wear and tear. This was done in response to the use of diversifying automotive fuels and the mass-production of low-priced materials that can be used as alternatives to rare metals.

-Valve seat materials: The Company developed a new and low-cost material that is designed to support intermediate loads. It is now planning to start mass-production of the material.

-New production line: The Company tested its new production line designed to manufacture shock absorbers. During trials, the new production line performed forming, sintering and sizing operations at the Company's headquarters building. The new production line was then moved to the Shiga Plant in September 2009 and now is operating commercially.

R&D Structure

-The Company's R&D activities are led by its technology development center and production engineering division.

Investment Activities

Investment Expenditures

(in millions of JPY)
  FY2009 FY2008 FY2007
Overall 1,146 3,444 4,843
Powder metallurgy product business 1,142 3,434 4,806

-The powder metallurgy product division invested 363 million yen to acquire machinery and equipment and 444 million yen to renew dies.

New Facilities

(As of Mar. 31, 2010)

Company Name Location Business Planned investment
(million JPY)
Start Completion Production capacity increase on completion
Precision Sintered Products (Wuxi) Co., Ltd. Jiangsu Prov.,
New facility and building for manufacturing powder metallurgy products 447 Jun.