Fall in Profits for Japanese Company Konica Minolta

Fall in Profits for Japanese Company Konica Minolta

The Japanese company Konica Minolta is a manufacturer of a range of printing products including laser printers, copiers and digital print systems. In the six months ending in September 2019 the company saw a significant decrease in operating profit, profit before tax and profit attributable to owners of the company. This is in spite of only a small decrease in gross profit and an even smaller decrease in sales revenue. There are a variety of factors at play that have caused these decreases in profit. Other companies that produce printing products, such as the Japanese corporation Kyocera, are experiencing a similar dip in profits.

The sales revenue recorded by the company in the six months leading up to the end of September 2019 were 487.4 billion yen, a 3.8% decrease on the recorded figure for the previous year (the six months leading to the end of September 2018) of 517 billion yen. Gross profit fell by 5.8%, a similarly small figure. But there were huge decreases in operating profit, which was down 84.3% from 34.6 billion yen in 2018 to 5.4 billion yen in 2019, and in profit before tax, which decreased by 95.3% from 33.1 billion yen to 1.5 billion yen in the months ending September 2019. Profit attributable to owners of the company, meanwhile, fell by an extraordinary 99.5%.

There are numerous reasons for this fall in profit. Shifting demand has resulted in a decrease in sales of optical systems for industrial use. Meanwhile uncertainty in markets, such as the European market, as well as trade tensions between the US and China have led to decreased investment. The Chinese economy has also slowed down. On going attempts to shift towards a high value-added sales strategy have not yet had the impact hoped for due to a delay in reducing manufacturing costs. The financial report also predicted a further decrease in profits in 2020.

For full report please kindly refer on Konica Minolta.