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Mitsubishi Electric Corporation (TOKYO:6503) reported its financial results for the first nine months and third quarter, which concluded on December 31, 2022. Revenue rose by 12% year-on-year to 3,565.2 billion yen, mainly due to a weaker yen and increased demand across several segments. However, operating profit fell 14% to 163.2 billion yen, driven by rising material costs and increased selling, general, and administrative expenses. Additionally, net profit attributable to stockholders decreased by 6% to 139.3 billion yen. For fiscal 2023, revenue forecasts were revised upward, but profit expectations remain unchanged.
Positive
Revenue increased by 12% to 3,565.2 billion yen.
Growth in Life segment due to demand recovery in air conditioning and building systems.
Third-quarter revenue rose by 18% year-on-year to 1,225.6 billion yen.
Third-quarter operating profit increased by 58% to 82.7 billion yen.
Negative
Operating profit decreased by 14% to 163.2 billion yen.
Net profit attributable to stockholders fell by 6% to 139.3 billion yen.
Deterioration in profitability due to rising material prices.
Selling, general and administrative expenses increased by 94.4 billion yen.
TOKYO--(BUSINESS WIRE)--
Mitsubishi Electric Corporation (TOKYO:6503) announced today its consolidated financial results for the first 9 months and third quarter, ended December 31, 2022, of the current fiscal year ending March 31, 2023 (fiscal 2023).
The full document on Mitsubishi Electric’s financial results can be viewed at the following link:
www.MitsubishiElectric.com/news
1. Consolidated First 9 Months Results (April 1, 2022 – December 31, 2022)
Revenue:
3,565.2
billion yen
(12% increase year-on-year)
Operating profit:
163.2
billion yen
(14% decrease year-on-year)
Profit before income taxes:
189.0
billion yen
(9% decrease year-on-year)
Net profit attributable to
Mitsubishi Electric Corp. stockholders:
139.3
billion yen
(6% decrease year-on-year)
The economy in the first 9 months of fiscal 2023, from April through December 2022, continued to see recovery in the corporate and household sectors in the U.S. In China, there was downward pressure due to the impact of lockdown and intermittent movement restrictions caused by the expansion of COVID-19. In Japan, gradual recovery continued primarily in the household sector. In Europe, the paces of recovery were even slower in the corporate and household sectors. There was also the impact of the rise in some material prices, high logistics costs and the prolonged electronic components shortage.
Revenue
Revenue increased by 383.9 billion yen year-on-year to 3,565.2 billion yen owing primarily to the weaker yen. The Life segment saw an increase in the building systems business in Asia and Japan, and the air conditioning systems & home products business also increased due mainly to a recovery in demand for air conditioners in Europe, North America and Japan. The Industry and Mobility segment saw an increase in the factory automation systems business due mainly to an increase in demand for capital expenditures related to products in the decarbonization area. The automotive equipment business also increased due to robust demand for electric vehicle-related equipment. The Business Platform segment saw an increase in the information systems & network service business due mainly to increases in the system integrations and the IT infrastructure service businesses. The semiconductor & devices business also increased due to robust demand for power modules and optical communication devices. The Infrastructure segment saw the public utility systems and the energy systems businesses remaining substantially unchanged year-on-year, while the defense & space systems business saw an increase in the defense systems business.
Operating profit
Operating profit decreased by 26.9 billion yen year-on-year to 163.2 billion yen due mainly to decreases in the Infrastructure segment, the Life segment, and the Industry and Mobility segment, despite an increase in the Business Platform segment. Operating profit ratio decreased by 1.4 points year-on-year to 4.6% due mainly to deteriorated cost ratio.
The cost ratio deteriorated by 1.3 points year-on-year as there was the impact of the rise in some material prices and the deteriorated profitability of the Infrastructure segment, despite the improvement owing to the weaker yen and price hike. Selling, general and administrative expenses increased by 94.4 billion yen year-on-year, and the selling, general and administrative expenses to revenue ratio deteriorated by 0.2 points year-on-year. Other profit (loss) increased by 2.6 billion yen year-on-year and other profit (loss) to revenue ratio improved by 0.1 points year-on-year.
Profit before income taxes
Profit before income taxes decreased by 18.1 billion yen year-on-year to 189.0 billion yen due primarily to a decrease in operating profit. The profit before income taxes to revenue ratio was 5.3%.
Net profit attributable to Mitsubishi Electric Corporation stockholders
Net profit attributable to Mitsubishi Electric Corporation stockholders decreased by 9.1 billion yen year-on-year to 139.3 billion yen due mainly to a decrease in profit before income taxes. The net profit attributable to Mitsubishi Electric Corporation stockholders to revenue ratio was 3.9%.
Revenue increased by 182.7 billion yen year-on-year to 1,225.6 billion yen owing primarily to the weaker yen. The Life segment saw an increase in the building systems business due to an increase in Asia and Japan, and the air conditioning systems & home products business also increased due mainly to a recovery in air conditioners in North America, Europe and Japan. The Industry and Mobility segment saw an increase in the factory automation systems business due to an increase in demand primarily for capital expenditures related to products in the decarbonization area. The automotive equipment business also increased due to robust demand for electric vehicle-related equipment in line with a year-on-year increase in sales of new cars in nearly all regions except China. The Business Platform segment saw an increase in the information systems & network service business due to an increase in the system integrations business, and the semiconductor & device business increased due mainly to robust demand for power modules. The Infrastructure segment saw the public utility systems business remaining substantially unchanged year-on-year, while the energy systems and the defense & space systems businesses increased.
Operating profit
Operating profit increased by 30.3 billion yen year-on-year to 82.7 billion yen due mainly to increases in the Life segment, Industry and Mobility segment and the Business Platform segment, despite a decrease in the Infrastructure segment. Operating profit ratio improved by 1.7 points year-on-year to 6.7% due mainly to an increase in revenue.
The cost ratio improved by 0.7 points year-on-year owing to the price hike and the weaker yen, despite the impact of the rise in some material prices. Selling, general and administrative expenses increased by 32.4 billion yen year-on-year, but the selling, general and administrative expenses to revenue ratio improved by 0.8 points year-on-year. Other profit (loss) increased by 2.5 billion yen and other profit (loss) to revenue ratio improved by 0.2 points year-on-year.
Profit before income taxes
Profit before income taxes increased by 27.1 billion yen year-on-year to 85.9 billion yen due primarily to an increase in operating profit. The profit before income taxes to revenue ratio was 7.0%.
Net profit attributable to Mitsubishi Electric Corporation stockholders
Net profit attributable to Mitsubishi Electric Corporation stockholders increased by 20.8 billion yen year-on-year to 64.5 billion yen due mainly to an increase in profit before income taxes. The net profit attributable to Mitsubishi Electric Corporation stockholders to revenue ratio was 5.3%.
Forecast for Fiscal 2023
The consolidated earnings forecast for fiscal 2023, ending March 31, 2023, has been revised from the announcement on October 28, 2022, as stated below. Revenue is expected to exceed the previous announcement due to the impact of the weaker yen and an increase in demand for the Life segment, while forecasts for profits remain unchanged from the previous announcement due primarily to a shift in project portfolios and lower profitability in the Infrastructure segment, as well as the rise in semiconductor and other electronic components prices.
Consolidated
Previous forecast
(announced
on October 28)
Current forecast
Change from previous
forecast
Revenue:
4,970.0 billion yen
5,020.0 billion yen
(12% increase from fiscal 2022)
Up 50.0 billion yen, or 1%
Operating profit:
270.0 billion yen
270.0 billion yen
(7% increase from fiscal 2022)
Unchanged, or 0%
Profit before income taxes:
295.0 billion yen
295.0 billion yen
(5% increase from fiscal 2022)
Unchanged, or 0%
Net profit attributable to
Mitsubishi Electric Corp. stockholders:
215.0 billion yen
215.0 billion yen
(6% increase from fiscal 2022)
Unchanged, or 0%
Exchange rates in the fourth quarter of fiscal 2023 are 130 yen to the U.S. dollar, which is 5 yen stronger than the previous announcement; 140 yen to the euro, which is 5 yen weaker than the previous announcement; and 19.0 yen to the Chinese yuan, which is unchanged from the previous announcement.
Note:
The results forecast above is based on assumptions deemed reasonable by the company at the present time, and actual results may differ significantly from forecasts. Please refer to the cautionary statement in the full document.
About Mitsubishi Electric Corporation
With more than 100 years of experience in providing reliable, high-quality products, Mitsubishi Electric Corporation (TOKYO:6503) is a recognized world leader in the manufacture, marketing and sales of electrical and electronic equipment used in information processing and communications, space development and satellite communications, consumer electronics, industrial technology, energy, transportation and building equipment. Mitsubishi Electric enriches society with technology in the spirit of its “Changes for the Better.” The company recorded a revenue of 4,476.7 billion yen (U.S.$ 36.7 billion*) in the fiscal year ended March 31, 2022. For more information, please visit www.MitsubishiElectric.com
*U.S. dollar amounts are translated from yen at the rate of ¥122=U.S.$1, the approximate rate on the Tokyo Foreign Exchange Market on March 31, 2022
