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During FY25 1Q-3Q, the global economy continued to grow moderately. In semiconductor-related markets and information and communication-related markets, which are our principal markets, generative AI continued to drive demand for data centers, but demands for general purpose data centers, smartphones and automotive markets, etc. remained sluggish.
Sales revenue for FY25 1Q-3Q was almost flat as compared with the nine months ended December 31, 2023 ("FY24 1Q-3Q"). Sales revenue of the Electronic Components Business and the Solutions Business exceeded the sales revenue of FY24 1Q-3Q partly due to the impact of a weaker yen, while sales revenue of the Core Components Business decreased slightly due to the weak demand for components.
Profit decreased significantly due mainly to a lower utilization ratio of production facilities in the Core Components Business and the Electronic Components Business and higher labor and other costs, as well as the recording of a loss for impairment of property, plant and equipment, etc. in the amount of approximately 43 billion yen in the Organic Packages and Boards Business, due to decline in sales and profits caused by the prolonged stagnant demand of FCBGAs for general purpose data centers, which is the main product of the business. As a result, as compared with FY24 1Q-3Q, operating profit decreased by 84.6% and profit before income taxes decreased by 59.8%. Profit attributable to owners of the parent decreased by 79.7%, due partly to the recording of tax expenses in the amount of approximately 18 billion yen resulting from reversal of deferred tax assets, etc. at overseas subsidiaries.
[Released on February 3, 2025]
During FY25 1Q-3Q, Kyocera recorded one-time costs such as a loss for impairment of property, plant and equipment in the Organic Packages and Boards Business and tax expenses resulting from reversal of deferred tax assets, etc. at overseas subsidiaries. In addition, regarding the Solutions Business, market recovery primarily in the Industrial Tools Unit and the Smart Energy Business has been below our original expectations. In light of this business outlook, Kyocera has revised its consolidated financial forecast for FY25 as set forth below.
By designating profitability improvement as a top priority, Kyocera will steadily implement management initiatives such as fundamental structural reforms in the Organic Packages and Boards Business and KAVX Group. Especially for the Organic Packages and Boards Business, Kyocera will take measures such as suspension of a capital expenditure originally planned to expand production capacity for existing products and relocation of personnel from such business.
