March 20 (Bloomberg) -- Mitsubishi Electric Corp., the Japanese maker of air conditioners and satellites, may acquire companies in emerging markets to expand its factory-automation equipment business.
The company may target purchases in countries including Turkey, Mexico, Indonesia and Thailand and may announce more details in May, President Kenichiro Yamanishi told reporters yesterday in Tokyo, where it’s based. Mitsubishi Electric is also benefiting from a weaker yen against the dollar, he said.
Mitsubishi Electric, which earned 66 percent of its revenue in Japan last fiscal year, is investing overseas amid slow economic growth in its home market. The company will open a factory in 2014 to make automobile equipment in Mexico and opened a unit in Istanbul to expand its electronics business in Turkey and surrounding regions in January.
“We want to use acquisitions to supplement what we’re missing in our overseas strategy,” Yamanishi said. The company also wants to add a second brand for overseas sales, he said.
The manufacturer aims to increase the portion of total revenue from abroad to 40 percent in the fiscal year starting April 2015, Yamanishi said.
While Japan’s weakening currency may boost earnings from overseas, it won’t be enough to change the company’s current earnings forecasts, Yamanishi said. The yen reached the weakest level since 2009 earlier this month.
Every 1-yen decline in the value of Japan’s currency against the dollar and euro boosts Mitsubishi Electric’s annual sales by 5 billion yen and 2 billion yen respectively, he said.
Mitsubishi Electric forecasts net income of 50 billion yen ($524 million) in the year ending March 31, down 55 percent from last fiscal year, the company said Feb. 4. Sales may decline 3.3 percent to 3.52 trillion yen, it said.
The company may delay its revenue target of 4 trillion yen to the 12 months starting April 2014 from next fiscal year, Yamanishi said yesterday.
Mitsubishi Electric rose 0.1 percent to 826 yen in Tokyo trading yesterday. The stock has gained 13 percent this year, trailing the 20 percent advance in Japan’s benchmark Nikkei 225 Stock Average.
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