Hoya: restructuring will soften fall in profits

Precision equipment maker Hoya Corp. expects cost savings from its streamlining programs to help raise group operating profit by some JPY 15 billion in the fiscal year starting April 2009.
For the 12…

Precision equipment maker Hoya Corp. expects cost savings from its streamlining programs to help raise group operating profit by some JPY 15 billion in the fiscal year starting April 2009. For the 12 months ending 24 March 2009, Hoya“s operating profit is forecast to slide 38% to JPY 59 billion. Thanks to its reorganization drive, it now appears feasible to prevent a further fall in profit to JPY 30-40 billion in fiscal 2009, a likely scenario had the firm failed to take any restructuring measures. However, considering its relatively steady medical-related operations, the company may achieve a softer decline in profit of 15% to around JPY 50 billion. Hoya is carrying out its streamlining initiative in two phases. The first one, launched in fiscal 2008, calls for moving digital camera production from Tochigi Prefecture to the Philippines and Vietnam, suspending an optical parts plant in Fukushima Prefecture, shutting down a research center in Nagano Prefecture, and withdrawing from the crystal glass business. Those moves are expected to help save some JPY 10 billion in annual fixed costs. The second stage, scheduled for the 1H of fiscal 2009, will include further facility consolidation.