Strengthening the Profitability and Competitiveness of the Overseas Smart Meter Business

「In the overseas measurement and control business, the company will work to expand revenue and profit by ensuring the successful expansion of the next-generation smart meter “NEOS,” which will be launched in the market in the next fiscal year, and by expanding solution sales combining it with upper-layer systems.」

「Operating profit increased year on year due to improved margins from higher sales in the UK and lower selling, general and administrative expenses resulting from organizational restructuring, among other factors.」

「Operating profit also increased compared with the previous fiscal year, due to improved margins resulting from higher sales in Oceania and favorable exchange-rate movements in the UK, including the appreciation of sterling against the US dollar.」

「In the overseas measurement and control business, shipments to Oceania increased steadily compared with the previous interim consolidated accounting period, while shipments to the UK declined due to customer inventory adjustments. As a result, revenue declined 0.7% from the previous interim consolidated accounting period to ¥19,424 million. In terms of earnings, strong performance in Oceania and improved profit margins in the UK due to favorable exchange-rate movements more than offset the impact of lower revenue and other factors, resulting in operating profit of ¥331 million, up 20.1% from the previous interim consolidated accounting period.」

「Overseas, the company will further shift toward a profit-focused business by pursuing the following measures in Oceania, Europe, particularly the UK, and regions across Asia, the Middle East and Africa: providing high-value-added solutions tailored to market characteristics; rebuilding the industrial-meter business; withdrawing from low-profit businesses; and reforming the organization.」

「In the overseas measurement and control business, shipments to the UK increased due to improved conditions for procuring electronic components, while shipments to Oceania also increased. As a result, revenue increased 32.8% year on year to ¥30,138 million. In terms of earnings, in addition to higher revenue, the easing of previously elevated electronic component prices and other factors resulted in operating profit of ¥782 million, compared with an operating loss of ¥1,343 million in the same period of the previous year.」

「In the overseas measurement and control business, shipments to the UK increased due to improved conditions for procuring electronic components, while shipments to Oceania also increased. As a result, revenue increased 33.5% year on year to ¥19,559 million. In terms of earnings, in addition to higher revenue, the easing of electronic component prices, which had risen due to procurement difficulties, and other factors resulted in operating profit of ¥276 million, compared with an operating loss of ¥777 million in the same period of the previous year.」

「Shipments to the UK increased as the electronic-component procurement environment improved, while shipments to Oceania also increased steadily. As a result, revenue rose 33.0% year on year to ¥9,581 million, and operating profit was ¥55 million, compared with an operating loss of ¥159 million in the same period a year earlier.」

「In the overseas measurement and control business, shipments to Oceania increased steadily compared with the same period of the previous year, while shipments to the UK declined due to difficulties procuring electronic components. Although revenue declined on a US-dollar basis, the functional currency, the impact of yen depreciation resulted in revenue of ¥22,699 million, up 6.1% year on year. In terms of earnings, higher component prices and other factors resulted in an operating loss of ¥1,343 million, compared with operating profit of ¥23 million in the same period of the previous year.」

「In the overseas measurement and control business, shipments to Oceania increased steadily compared with the same period of the previous year, while shipments to the UK declined due to difficulties procuring electronic components. As a result, revenue increased 0.2% year on year to ¥14,647 million. In terms of earnings, higher component prices and other factors resulted in an operating loss of ¥777 million, compared with operating profit of ¥118 million in the same period of the previous year.」

「Operating profit was an operating loss of ¥159 million, compared with an operating profit of ¥163 million in the same period a year earlier, due to higher raw-material prices and transportation costs, as well as increased selling, general and administrative expenses.」

「As a result, revenue increased 12.4% year on year to ¥21,395 million, and operating profit was ¥23 million, compared with an operating loss of ¥180 million in the same period a year earlier.」

「Shipments to Oceania and for the UK project increased compared with the same period a year earlier, which was affected by COVID-19. As a result, revenue rose 13.1% year on year to ¥14,613 million, and operating profit was ¥118 million, compared with an operating loss of ¥224 million in the same period a year earlier.」

「Shipments for the UK project increased. Operating profit rose 637.4% year on year to ¥163 million, reflecting improved production efficiency accompanying the increase in UK project shipments and lower selling, general and administrative expenses.」

「In the overseas measurement and control business, smart-meter installation stalled in the countries where our Group operates due to lockdowns related to the spread of COVID-19, and shipments to Oceania, the UK, and Asia declined. Orders for the Kurdistan Regional Government in Iraq and Cambodia also declined compared with the strong results in the same period of the previous year. As a result, revenue was ¥19,033 million, down ¥9,352 million, or 32.9%, year on year. In terms of earnings, although selling, general and administrative expenses declined, the aforementioned revenue decline resulted in an operating loss of ¥180 million, a year-on-year decline in operating profit of ¥993 million, compared with operating profit of ¥813 million in the same period of the previous year.」

「Shipments to Oceania and Asia declined, while the UK project, for which business expansion had been expected from the current fiscal year, remained at the same sales level as in the same period a year earlier. Orders for Iraq's Kurdistan Regional Government and Cambodia also declined compared with the strong performance in the same period a year earlier. As a result, revenue was ¥12,916 million, a decline of ¥6,134 million, or 32.2%, year on year. Although selling, general and administrative expenses declined, the decline in revenue described above resulted in an operating loss of ¥224 million, a deterioration of ¥786 million year on year from the ¥561 million operating profit recorded in the same period a year earlier.」

「Revenue declined 12.6% year on year to ¥7,816 million. In terms of profit, operating profit fell 95.7% year on year to ¥22 million, as the decline in revenue described above was compounded by a lower profit margin resulting from a change in product mix.」

「Compared with the previous fiscal year, earnings improved substantially due to the acquisition of large projects in emerging markets and other factors, producing a certain degree of progress toward “profit-focused global growth,” one of the key strategies in the medium-term management plan.」

「As a result, revenue increased 21.2% year on year to ¥64,796 million. Operating profit rose 28.1% year on year to ¥3,132 million, reflecting higher overseas revenue and a lower SG&A ratio, among other factors.」

「Revenue increased 24.1% year on year to ¥42,745 million. Operating profit rose 41.0% year on year to ¥1,895 million, driven by higher overseas revenue and a lower SG&A ratio, among other factors.」

「As a result, revenue rose 26.6% year on year to ¥20,045 million. Operating profit increased sharply by 109.5% year on year to ¥1,116 million, reflecting higher overseas revenue and a lower SG&A ratio, among other factors.」

「Sales of smart meters to Australia increased. New projects in the Middle East also contributed, and communications-hub sales in the UK rose, but full-scale smart-meter shipments to the UK were pushed back to the following fiscal year.」

「Overseas revenue declined because production was delayed by difficulty procuring certain electronic components.」

「Overseas revenue from smart meters in Australia and communications hubs in the UK increased, but shipments to New Zealand and emerging markets declined, leaving overseas revenue at roughly the same level as in the same period a year earlier.」

「In anticipation of stronger future demand for smart meters overseas, the company pursued active sales efforts and expanded its production capacity, but overseas revenue declined because orders from Oceania and emerging markets were lower than in the same period a year earlier.」

「OSAKI United International Pte. Ltd., which operates the global business, had experienced delays in the UK government's smart-meter rollout plan, but demand is expected to begin picking up in the second half of fiscal 2018. In the overseas business, the company will strengthen its smart-meter production and supply systems to expand its operations in the UK, while pursuing further cost reductions to increase profit, including for communications hubs that have already begun shipping.」

「Consolidated revenue was ¥56,741 million, down 6.5% year on year, due to delays in the UK smart-meter project, lower sales in emerging markets and declining sales of products being phased out as smart meters become more widespread in Japan.」

「Consolidated revenue was ¥36,550 million, down 6.7% year on year. Revenue from the core domestic electricity-meter business remained firm, but overseas revenue declined due to delays in the UK smart-meter project and a reactionary decline from the strong performance in Oceania a year earlier, as well as lower sales of products being phased out as smart meters become more widespread in Japan.」

「The overseas electricity-meter market has remained stable, particularly in Oceania, while demand for the UK smart-meter project and in some emerging markets is expected to expand from the second half of the fiscal year.」

「In the measurement and control equipment business, revenue from smart meters sold to domestic electric utilities increased steadily, while overseas electricity-meter revenue also rose in Europe, Oceania and other regions. As a result, both revenue and profit increased year on year in Japan and overseas. Revenue rose 15.7% year on year to ¥84,989 million, and operating profit increased by ¥4,149 million year on year to ¥7,913 million.」

「The business is seeing steady growth in smart-meter sales to domestic electric utilities, while overseas electricity-meter sales are also increasing in Europe, Oceania and other regions. As a result, both domestic and overseas operations are trending toward higher revenue and profit. Revenue rose 15.9% year on year to ¥60,074 million, while operating profit increased by ¥3,592 million year on year to ¥6,232 million.」

「The business saw steady growth in sales of smart meters supplied to domestic electric utilities, while sales in the overseas electricity-meter business also increased in Europe, Oceania, and other regions, resulting in a trend of higher revenue and earnings both domestically and overseas. As a result, revenue increased 19.7% year on year to ¥38,785 million, and operating profit increased by ¥2,781 million year on year to ¥3,853 million.」

「The business saw steady growth in sales of smart meters supplied to domestic electric utilities, while sales in the overseas electricity-meter business also increased in Europe, Oceania, and other regions, resulting in a trend of higher revenue and earnings both domestically and overseas. As a result, revenue increased 22.5% year on year to ¥18,116 million, and operating profit increased by ¥1,489 million year on year to ¥1,587 million.」

「We will establish a supply structure for communication hubs for smart meters ordered in the UK and further strengthen our competitiveness to secure earnings while responding to the expected growth in smart meters in Europe and elsewhere.」