January 6, 2018 2:00 am JST
Earnings preview

Tool maker Nachi-Fujikoshi's profit likely ratcheted up 44%

Industrial robot sales surged on rising international demand

Factory robots have become a fast-growing segment for Nachi-Fujikoshi, whose core business is automotive bearings.

TOKYO -- Japanese industrial goods maker Nachi-Fujikoshi's group operating profit apparently jumped 44% to around 16 billion yen ($141 million) for the fiscal year ended Nov. 30 on growing demand for factory automation equipment, particularly in China.

This would mark a recovery after the Tokyo-based company's profit fell in fiscal 2016. Sales likely rose 11% to about 235 billion yen, 5 billion yen more than forecast.

The profit gain owed mainly to Nachi-Fujikoshi's robot business, which accounts for just over 10% of sales. The segment apparently saw top-line growth of roughly 50%, reflecting rising factory automation demand among the growing ranks of electronics manufacturing service providers in Asia, as well as in such areas as food and pharmaceutical production in Japan, the U.S. and Europe. The addition of more service centers overseas provided a boost to sales as well.

Nachi-Fujikoshi also enjoyed higher-than-expected sales of hydraulic equipment for construction machines in China and Western markets. An increase in urban construction buoyed demand for pumps and other components for compact machines like mini-excavators -- a company specialty.

Overall Chinese sales likely climbed more than 30% thanks to the strong showings in the robot and hydraulic equipment segments.

Nachi-Fujikoshi's mainstay automotive bearing business recovered from a fiscal 2016 slump following major earthquakes in southwestern Japan. Sales of bearings for machine tools picked up as well.

Yet operating profit likely failed to beat Nachi-Fujikoshi's 16 billion yen forecast. Expansion of production capacity inside and outside Japan brought higher labor costs, and the company stepped up spending on research and development.

Sales and profit are likely to grow again in fiscal 2018 amid sustained demand for industrial robots along with increased production. The company also looks set to pass on higher material costs for machine tool parts to customers.

Nachi-Fujikoshi is scheduled to release fiscal 2017 results on Thursday.

(Nikkei)

Nachi-Fujikoshi Corp.

Japan

Market(Ticker): TKS(6474)
Sector:
Industry:
Producer Manufacturing
Industrial Machinery
Market cap(USD): 1,878.5M
Shares: 249.19M

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