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Japan-Update

Fujitsu's overseas profit seen soaring 100-fold in fiscal 2017

Device sales, system installation demand are rising

TOKYO -- Fujitsu's overseas operation is on track to recover sharply in the current year through March 2018, thanks to brisk sales of system support and an absence of restructuring costs logged the year before.

The Japanese provider of information technology equipment and services sees its overseas businesses generating around 40 billion yen ($352 million) in operating profit -- compared with 400 million yen in fiscal year 2016 and the highest in three years.

The company expects overseas sales, which account for about a third of its total sales, to shrink 10% to around 1.5 trillion yen, partly because of the sale of Fujitsu Ten -- which offers car navigation systems in the U.S. and elsewhere -- to auto parts maker Denso. The 105 yen-per-dollar exchange rate assumed for this fiscal year is three yen stronger to the greenback than the previous year, and this also curbs revenue outlook in yen terms.

But corporate appetite to invest in information technology systems is strong, and demand for system installation support is expected to grow. Sales of electronics parts and system chips used in smartphones are seen picking up as well.

And the absence of around 38 billion yen in restructuring costs logged last fiscal year, for downsizing European staff and other steps, will buoy results this fiscal year. Lately, the yen has been trading weaker than Fujitsu has assumed, so this may lift profit as well.

President Tatsuya Tanaka aims to raise the company's operating margin to 10% from 3% last fiscal year during his tenure. The company seeks to achieve this quickly by raising profitability overseas.

(Nikkei)

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