Mitsubishi Electric Announces Consolidated Financial Results for the First Half and Second Quarter of Fiscal 2021

Mitsubishi Electric Corporation (TOKYO:6503) announced today its consolidated financial results for the first half and second quarter, ended September 30, 2020, of the current fiscal year ending March 31, 2021 (fiscal 2021).

The full document on Mitsubishi Electric’s financial results can be viewed at the following link:

www.MitsubishiElectric.com/news

1. Consolidated Half-year Results (April 1, 2020 – September 30, 2020)

The economy in the first half of fiscal 2021, from April through September 2020, generally saw a severe business environment without an economic recovery in Japan, the U.S. and Europe due to the continuing impact of the novel coronavirus diseases (COVID-19), although it is under way owing to the restart of the economy. Meanwhile, China experienced a gradual recovery mainly owing to an increase in capital expenditures for fixed assets, particularly in public investment, as an effect of political measures.

Revenue

Revenue in the first half decreased by 280.5 billion yen from the same period of the previous fiscal year to 1,902.0 billion yen as a result of decreased revenue in all segments. Energy and Electric Systems segment saw a decrease in the building systems business in Japan and Asia due to the impact of COVID-19 causing global stagnation of urban development and construction, while the social infrastructure systems business increased particularly in the transportations systems and the power systems businesses in Japan. Industrial Automation Systems segment saw a significant decrease of the automotive equipment business due to decreased demand for new cars in all regions except for China. The factory automation systems business also decreased due to stagnation in automotive-related demand worldwide and machinery- and building-related demand in Japan. Home Appliances segment saw a decrease in air conditioners due to limited economic activities outside Japan and restrained capital expenditures worldwide.

Operating Profit

Operating profit decreased by 52.8 billion yen from the same period of the previous fiscal year to 61.3 billion yen due mainly to decreased profits in Industrial Automation Systems and Home Appliances segments, while profits increased in Energy and Electric Systems, Electronic Devices and Information and Communication Systems segments. Operating profit ratio decreased by 2.0% from the same period of the previous fiscal year to 3.2%.

The cost ratio increased by 1.2% from the same period of the previous fiscal year due primarily to lowered operation caused by decreased revenue of Industrial Automation Systems and Home Appliances segments. Selling, general and administrative expenses decreased by 50.3 billion yen from the same period of the previous fiscal year due mainly to reduced cost, but selling, general and administrative expenses to revenue ratio increased by 0.8%. Other profit (loss) decreased by 0.2 billion yen from the same period of the previous fiscal year, while other profit (loss) to revenue ratio remained substantially unchanged from the same period of the previous fiscal year.

Profit before income taxes

Profit before income taxes decreased by 48.3 billion yen from the same period of the previous fiscal year to 75.6 billion yen due primarily to a decrease in operating profit despite an improvement in non-operating expenses owing to decreased loss on foreign exchange. Profit before income taxes to revenue ratio was 4.0%.

Net profit attributable to Mitsubishi Electric Corporation stockholders

Net profit attributable to Mitsubishi Electric Corporation stockholders decreased by 43.0 billion yen from the same period of the previous fiscal year to 48.2 billion yen due mainly to decreased profit before income taxes. Net profit attributable to Mitsubishi Electric Corporation stockholders to revenue ratio was 2.5%.

2. Consolidated Second-quarter Results (July 1, 2020 – September 30, 2020)

Revenue

Revenue in the second quarter decreased by 87.8 billion yen from the same period of the previous fiscal year to 1,043.8 billion yen as a result of decreased revenue in all segments. Energy and Electric Systems segment saw a decrease in the building systems business in Japan and Asia due to the continuing impact of COVID-19, while the social infrastructure systems business increased particularly in the transportations systems, the power systems and the public utility systems businesses in Japan. Industrial Automation Systems segment saw a decrease of the automotive equipment business due to decreased demand for new cars, although the number increased compared to the first quarter. The factory automation systems business also decreased due to continuing stagnation in automotive-related demand worldwide and machinery- and building-related demand in Japan. Home Appliances segment saw a decrease in air conditioners as demand for industrial air conditioners continued to decrease due to limited economic activities outside Japan and restrained capital expenditures worldwide, while demand for residential air conditioners increased compared to the first quarter.

Operating Profit

Operating profit decreased by 18.1 billion yen from the same period of the previous fiscal year to 41.1 billion yen due mainly to decreased profit in Industrial Automation Systems and Energy and Electric Systems segments, while profit increased in Electronic Devices and Information and Communication Systems segments. Operating profit ratio decreased by 1.3% from the same period of the previous fiscal year to 3.9%.

The cost ratio increased by 1.4% from the same period of the previous fiscal year due primarily to lowered operation caused by decreased revenue of Industrial Automation Systems segment. Selling, general and administrative expenses decreased by 22.6 billion yen from the same period of the previous fiscal year due mainly to reduced cost, and selling, general and administrative expenses to revenue ratio improved by 0.3%. Other profit (loss) deteriorated by 1.0 billion yen from the same period of the previous fiscal year, while other profit (loss) to revenue ratio deteriorated by 0.2%.

Profit before income taxes

Profit before income taxes decreased by 15.7 billion yen from the same period of the previous fiscal year to 48.5 billion yen due primarily to a decrease in operating profit despite an improvement in non-operating expenses owing to decreased loss on foreign exchange. Profit before income taxes to revenue ratio was 4.7%.

Net profit attributable to Mitsubishi Electric Corporation stockholders

Net profit attributable to Mitsubishi Electric Corporation stockholders decreased by 18.1 billion yen from the same period of the previous fiscal year to 30.3 billion yen due mainly to decreased profit before income taxes. Net profit attributable to Mitsubishi Electric Corporation stockholders to revenue ratio was 2.9%.

Forecast for Fiscal 2021(year ending March 31, 2021)

Revenue for fiscal 2021 is expected to fall below the company’s previous forecast, due to the delay in an economic recovery caused by the continuing impact of COVID-19, while the profits are expected to exceed the company’s previous forecast due to the accumulation of positive impact of various business improvement measures, particularly cost reduction. As a result, the company’s consolidated earnings forecast for fiscal 2021 has been revised from the announcement on July 30, 2020 as stated below.

The forecast may be modified depending on the global and local situation of the continuing impact and the re-expansion of COVID-19.

Consolidated forecast for fiscal 2021

Exchange rates in and after the third quarter of fiscal 2021 is 105 yen to the U.S. dollar, which is unchanged from the previous announcement; 120 yen to the euro, which is 5 yen weaker from the company’s previous announcement; and 15.0 yen to the Chinese yuan, which is unchanged from the previous announcement.

About Mitsubishi Electric Corporation

With nearly 100 years of experience in providing reliable, high-quality products, Mitsubishi Electric Corporation (TOKYO: 6503) is a recognized world leader in the manufacture, marketing and sales of electrical and electronic equipment used in information processing and communications, space development and satellite communications, consumer electronics, industrial technology, energy, transportation and building equipment. Mitsubishi Electric enriches society with technology in the spirit of its corporate statement, “Changes for the Better,” and environmental statement, “Eco Changes.” The company recorded a revenue of 4,462.5 billion yen (U.S.$ 40.9 billion*) in the fiscal year ended March 31, 2020. For more information, please visit www.MitsubishiElectric.com

*U.S. dollar amounts are translated from yen at the rate of ¥109=U.S.$1, the approximate rate on the Tokyo Foreign Exchange Market on March 31, 2020

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