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Overview of Consolidated Financial Results for the First Half of the Fiscal Year Ending March 31, 2018

Sales for the first half of the consolidated fiscal year under review rose to ¥24,765 million (up 18.3% year on year), reflecting year-on-year increases in all segments. In terms of operating income, the vehicle communication equipment segment recorded a loss, but the two segments of circuit testing connectors and personal communication equipment recorded substantial increases in profit. As a result, overall operating income increased to ¥1,316 million (up 17.3% year on year). Ordinary income was ¥1,395 million (up 103.2% year on year), due in part to foreign exchange gains of ¥5 million reflecting the depreciation of the yen during the first half of the consolidated fiscal year under review, in contrast to the posting of the large amount of foreign exchange losses in the same period of the previous fiscal year. Profit attributable to owners of parent rose sharply from a year earlier, to ¥1,071 million (up 163.2% year on year) mainly due to a normalized tax burden rate, in addition to increased ordinary income.

Overview of Sales by Product

The profit and loss measurement method applicable to the reporting segments was changed, effective from the consolidated first quarter under review. In the following year-on-year comparison, the figures for the same period of the previous fiscal year are reclassified in accordance with the change to the measurement method.

Vehicle Communication Equipment

In the vehicle market, a key market for this segment, there was stable demand in ASEAN countries, but new vehicle sales fell below the year-ago level as demand leveled off in the US market. In the Chinese market, growth slowed. In Japan, new vehicle sales increased year on year due to a significant upturn in sales of light vehicles, in addition to a steady rise in the number of registered vehicles.
In this environment, sales of mainstay products such as shark fin antennas, micro antennas and other antennas for car manufacturers were up on the previous year due to sales growth both in Japan and overseas. In terms of key domestic products meanwhile, sales of film antennas were up year on year, while sales of ETC antennas were down due to a decline in extraordinary demand for ETC 2.0-compatible antenna products.
As a result, sales for this segment increased to ¥17,232 million (up 14.3% year on year) from a year earlier. In terms of profit, the segment recorded a loss of ¥76 million (a profit of ¥673 million in the same period of the previous year). This reflected increased labor costs for pay raises in China for securing and improving the retention rate of production personnel and significantly increased transport costs from frequent use of airfreight resulting from decreased productivity due to the increased ratio of newly hired employees and delayed purchase of parts.

Circuit Testing Connector

In the market for semiconductor testing systems, a key market for this segment, there was sluggish demand for PCs and declining demand for tablet PCs, as well as concerns over growth in products for smartphones. The market is expected to continue to grow on an overall basis however, due to increased demand for NAND, DRAM, and other memory products.
In this environment, sales of BGA sockets and other jigs for semiconductor back-end testing, which comprise the Groupís mainstay products, were up significantly on the previous year due to strong surge in orders and the effects of the weak yen. Sales of jigs for semiconductor front-end testing, for which high-frequency electronic component testing MEMS probe cards form a strategic centerpiece, were also up year on year, due to active sales promotion.
As a result, sales in this segment increased significantly from a year earlier, to ¥4,456 million (up 29.6% year on year). Net income from this segment was 822 million (up 192.1% year on year), reflecting increased sales as well as the lower cost ratio due to the higher ratio of Malaysian plant production and the benefits of a weaker yen.

Personal Communication Equipment

The mobile device and POS terminal markets are the principal markets for this segment. In the mobile device market, growth is slowing for smartphones and tablets due to the trend towards worldwide saturation. POS terminals on the other hand are increasingly used in a wide range of industries, including physical distribution and manufacturing. The market for POS terminals is therefore expected to expand steadily, as devices become more diverse and offer more advanced functionality.
In this environment, sales rose from the same period the previous fiscal year in the fine connector business, with fine spring connectors as the companyís core products. This was due to strong sales of products for POS terminal manufacturers, and an underlying recovery in products for mobile device manufacturers, thanks to an increase in orders.
In the medical device business, which also forms part of this segment, sales grew year on year due to factors such as stepping up sales of guide wire units to overseas customers.
As a result, sales in this segment increased significantly from a year earlier, to ¥3,076 million (up 26.9% year on year). Net income from this segment was ¥552 million (up 238.8% year on year) due to increased sales and the increased sales ratio of products with relatively high profit ratios.

Sales Unit: million yen
Operating Income Unit: million yen
Ordinary Income Unit: million yen
Profit (Loss) Attributable to Owners of Parent Unit: million yen
Net Income per Share Unit: yen
  3/15 3/16 3/17 3/18*
Sales(million yen) Whole fiscal year 34,414 39,998 44,077 49,500
2Q 16,151 19,432 20,937 24,765
Operating Income(million yen) Whole fiscal year 871 1,057 2,516 2,850
2Q 428 449 1,122 1,316
Ordinary Income(million yen) Whole fiscal year 1,713 822 2,608 2,700
2Q 711 385 686 1,395
Profit (Loss) Attributable to Owners of Parent (million yen) Whole fiscal year 1,609 412 2,381 1,800
2Q 732 △128 407 1,071
Net Income per Share(yen) Whole fiscal year 80.44 20.61 118.94 89.17
2Q 36.60 △6.41 20.35 53.14
*Numbers for the full year of the term ending March 2018 are forecasts announced on November 9, 2017.