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President's Message
Aiming to be a leading global semiconductor company, NEC Electronics Group is working to increase its business value and share value based on the following principles:
- The focus of business on the three product areas of SoC (system on chip), microcomputers, and discrete & IC in the sectors of automobiles, industrial devices and consumer devices.
- Utilization of the close relationship between development and production to create new capacity and value.
- An integrated policy of responsibility from development through production and support to earn customer trust.
- Development and expansion of the product groups and areas to create new value and earn social trust.
Financial Results For The Six Months Ended September 30, 2008
The global economic situation deteriorated during the six months ended September 30, 2008, as a financial crisis spread from the United States to the rest of the world. As evidenced by the drop in stock prices around the world, and the currency fluctuations observed by the stronger yen, the global economy became increasingly unstable. The semiconductor market, too, grew increasingly severe as customers reduced inventories and orders.
Consolidated net sales for the six months ended September 30, 2008 were 333.6 billion yen, down 17.4 billion yen, or 5.0% year on year. Sales of Automotive products increased year on year, but sales of semiconductors for mobile handsets and general-purpose products such as discrete semiconductors and microcontrollers decreased.
Consolidated operating income was 1.2 billion yen, securing a profit despite a decline of 0.6 billion yen year on year. Although consolidated sales declined sharply year on year, the amount of depreciation decreased, and fixed costs were reduced as a result of improved management efficiency, leading to improved cost to sales ratio. Consolidated loss before income taxes was 0.0 billion yen, 1.8 billion yen worse year on year. Consolidated net loss was 1.9 billion yen, a 1.1 billion yen improvement year on year.
Although the abrupt decline of the business environment has made it difficult to achieve a net income for the year, the company is dedicated to improving its financial results through the continuous reduction of fixed costs and improvements in management efficiency, as well as by accelerating the reorganization of manufacturing lines, and strengthening its focus on competitive products.
I ask for your continued understanding, guidance and support of our efforts going forward.
November 2008
TOSHIO NAKAJIMA
President and CEO, NEC Electronics Corporation