February 26, 2014 2:23 am JST

Nisshinbo seen with pretax profit gain for fiscal 2013

TOKYO -- Nisshinbo Holdings Inc.'s group pretax profit is expected to climb 2% on the year for the fiscal year ending March 31, up from the projected 4% slide, thanks in part to the strong performance of joint ventures selling electronic braking systems.

     The company will likely log a pretax profit of roughly 18 billion yen ($173.82 million), beating the 17 billion yen guidance. Profit from equity-method affiliates is on pace to come in higher than expected, jumping 60% to more than 5 billion yen.

     Nisshinbo owns a 40% stake in a joint venture with German autoparts maker Continental that produces electronic braking systems. Cars equipped with the systems are gaining traction in China and South Korea, boosting shipments.

     Earnings from a joint venture with Germany's Hella, added to the group this fiscal year, are stronger than projected as well.

     Nisshinbo is also expected to log 3 billion yen in exchange gains from the yen's decline against the euro.

     Sales are anticipated to climb 9% to more than 490 billion yen, edging past the company's estimate. Higher demand for anti-disaster measures is lifting orders for wireless systems by municipalities. Sales of brake friction materials have proved stronger than expected in the U.S. and South Korea, with collision avoidance sensors also beating expectations.

     Operating profit is on track to decline 10% to around 12 billion yen, roughly in line with the forecast. Euro-denominated goodwill amortization expenses associated with a European subsidiary purchased in 2011 have swelled on the yen's slide.

     Net profit is seen dropping 22% to 5 billion yen, in line with the guidance. The company will likely take significant one-time losses from plant relocation and premiums added on to voluntary retirement packages offered to employees in the electronics business.

     For fiscal 2014, sales will likely rise 4% from this fiscal year's expected figure to 510 billion yen. Operating profit is seen jumping 33% to 16 billion yen. The company aims to strengthen earnings by reorganizing the unprofitable textiles business and boosting overseas sales of marine wireless systems.

(Nikkei)