Investment Bridge Announces Investment Opinion: Bridge Report on Ferrotec
Corporation: Large Loss Incurred in FY3/13 on Weak Market Conditions,
Earnings Recovery Expected in FY3/14
NOTE TO EDITORS: The following is an investment opinion issued by Investment
TOKYO -- July 9, 2013
Investment Bridge, one of Japan's leading IR services companies, has issued a
"Bridge Report" on Ferrotec Corporation (JASDAQ:6890) reviewing its FY3/13
earnings results and FY3/14 earnings estimates.
*Sales fell by 36.1% year-over-year to JPY38.4 billion and an operating
loss of JPY3.6 billion was recorded due to difficult operating conditions
of the photovoltaic cell panel makers during FY3/13.
*During FY3/14, sales are expected to grow by 9.3% year-over-year to
JPY42.0 billion and operating income is expected to recover to a profit of
JPY1.0 billion on the back of recoveries in sales of the equipment related
and electronic device business segments.
*The Bridge Report calls attention to apparent bottoming in the difficult
operating conditions encountered from FY3/12 onwards, and its earnest
efforts to fortify its business and to implement proactive investor
relations to restore investor confidence.
Ferrotec Corporation manufactures and sells single and multi crystal silicon
ingot manufacturing equipment and other products in the photovoltaic related
segment. Ferrotec also supplies various parts, consumables and equipments for
semiconductor, flat panel display (FPD), and LED applications in equipment
related segment, and various thermoelectric temperature controllers for
automobile seat and home appliances in electronic device segment.
Difficult operating conditions that arose during FY3/12 continued to impact
earnings in FY3/13 and led to a 36.1% year-over-year decline in sales to
JPY38.4 billion and an operating loss of JPY3.6 billion. Weakness of the
photovoltaic cell panel makers contributed to a large 54.9% year-over-year
decline in photovoltaic related business segment sales. Also, declines in
capital investments and production of the semiconductor and FPD industries
contributed to 24.2% fall in equipment related business segment sales, and
weak demand for thermoelectric modules led to a 14.5% year-over-year decline
in electronic device business segment sales.
During FY3/14, difficulties in the silicon crystal manufacturing equipment are
expected to contribute to a 9.5% year-over-year decline in photovoltaic
related business sales, but investments for miniaturization of semiconductors
and for mobile applications of FPDs are expected to boost sales of the
equipment related business by 18.2% year-over-year and increases in demand for
thermoelectric modules on the back of recoveries in consumer products are
expected to allow electronic devices business sales to rise by 15.8%
year-over-year. Consequently, total consolidated sales are expected to rise by
9.3% year-over-year to JPY42.0 billion. Furthermore, the disappearance of
unprofitable business and cost reductions are expected to allow operating
income to improve to a profit of JPY1.0 billion.
The Bridge Report notes that while difficult conditions have been encountered
from the second quarter of FY3/12, the near term business environment appears
to have bottomed and progress has been made in Ferrtoec's business
restructuring plan during FY3/13. The Report also notes that the Company's
earnest efforts to fortify its businesses and implement proactive investor
relations may take little time before investor confidence is restored.
To view the full report, please go to the website at the URL listed below.
About Bridge Report:
Bridge Report is produced by Investment Bridge Co., Ltd. and provides accurate
and objective information about the earnings, business strategies, and other
information of publicly traded Japanese companies.
Investment Bridge Co., Ltd.
Kaoru Hosaka for Ferrotec Corporation
+81-3-5842-5765 (Japanese correspondence only)
firstname.lastname@example.org (English and Japanese correspondence)
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