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| Chairman and President Kazuo Sumita |
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To Our Shareholders,
Firstly, let me thank you for your continued and unstinting support of Hirakawa Hewtech Corp.
The electronics market, our primary source of business, is continuing to see increased demand in high-speed large-capacity data transfer and related areas, due mainly to the upswing in the volume of data traffic. However, recent problems such as the supply chain confusion caused by the Great East Japan Earthquake in March have impacted demand in the automotive and consumer device markets, dealing a blow to our business as a whole.
Under these difficult business conditions, we are working hard to fulfill our 71st fiscal year policy goal, which is to carry out well-crafted business innovations that allow us to achieve an even higher level of productivity and customer satisfaction. Implementing revolutionary medium and long-term growth strategies that utilize our corporate strength will enable us to respond quickly and flexibly to the sudden changes in business conditions that typify the global business environment subsequent to the Lehman shock of 2008.
As a result of these efforts and due to the acquisition of Shikoku Cable as a subsidiary company, our total sales in the consolidated cumulative second quarter reached 8.616 billion yen (a 19.3% increase over the same period last year) and our quarterly net profit rose to 485 million yen--a 122.1% increase over the same period in fiscal 2010. On the downside, however, our operating profit slipped to 369 million yen (a 3.1% decrease over the same period last year) and our ordinary profit also slipped to 351 million yen (a 3.7% decrease over the 2nd quarter in fiscal 2010).
Looking at the next half year, although we anticipate that the supply chain will be re-established and the economy will continue its gradual recovery, we fear that ongoing issues such as electricity shortages and the rising yen, compounded by the economic downturn and worsening financial problems in Europe and the United States, will make it difficult to achieve sustained economic recovery.
However, the Hirakawa Hewtech Group is committed to enhancing profitability even under difficult conditions by concentrating investment in flagship products as well as investing in new products and implementing strategies to raise productivity and reduce fixed costs.
All members of the board and employees of Hirakawa Hewtech pledge to work together to achieve our policy goals and prove worthy of the continued support and trust of you, our valued shareholders.
December, 2011
