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During FY25, the global economy continued to grow moderately. In semiconductor-related markets and information and communication-related markets, which are our principal markets, AI-related segments have expanded due to continued demand for data centers driven by generative AI, but demand in other markets, such as automotive markets, etc., have remained sluggish.
Sales revenue for FY25 was almost flat as compared with the year ended March 31, 2024 ("FY24").
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 of the Core Components Business. As a result, operating profit decreased by 70.6%, and profit before income taxes decreased by 53.3%, as compared with FY24. Profit attributable to owners of the parent decreased by 76.2%, as compared with FY24, 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 May 14, 2025]
Regarding the Japanese economy and the global economy during FY26, there are concerns that the current extremely uncertain situation could continue, including the possibilities of economic slowdown and rapid fluctuations in foreign exchange rates, mainly due to the impact of tariff measures by the United States and countermeasures by various countries. Although AI-related investment in our principal markets, namely the semiconductor-related markets, the information and communication-related markets and the automotive-related markets, are expected to remain firm, uncertainty regarding the demand outlook for each of our businesses is rising due to the unpredictable economic environment.
In light of this outlook, Kyocera will continue to promote cost reductions in all businesses and steadily advance structural reforms to strengthen its management foundation and improve profitability, with the aim of making Kyocera once again a highly profitable company in the future. Specifically, Kyocera will steadily implement management initiatives such as achieving profitability in the Organic Packages and Boards Business and Kyocera AVX Components Corporation Group, reorganizing our business portfolio through "selection and concentration", and optimizing investment.
Kyocera has generated its consolidated financial forecast for FY26 as shown below, taking into account factors such as the impact of reciprocal tariffs by the United States. Specifically, Kyocera classified its transactions into the following categories: (1) direct exports from the Kyocera Group to the United States, (2) exports from the Kyocera Group to the United States via third parties in third countries, and (3) imports by the Kyocera Group into the United States from third parties other than the Kyocera Group. For April 2025 to June 2025, the tariff rate used for calculation was 10%, and for July 2025 to March 2026, the impact of additional country-specific tariff rates (as of May 9, 2025) has been taken into account. As a result, Kyocera expects a decrease in profit of approximately 17 billion yen in FY26.
As for anticipated exchange rates, we expect the exchange rates for FY26 to be 135 yen to the U.S. dollar and 150 yen to the euro. As a result, after translation into yen for FY26, sales revenue is estimated to be pushed down by approximately 107 billion yen and profits are estimated to be pushed down by approximately 13 billion yen, as compared with FY25.
