Net sales for the 1st quarter of fiscal year ending March 2007 increased by 29.6 billion yen as a result of the decrease in domestic sales volume and deteriorated sales mix offset by a foreign exchange gain of 15.8 billion yen and the increased sales volume in overseas markets.
Operating income rose by 9.6 billion yen to 10.8 billion yen primarily due to foreign exchange gains in addition to overseas sales increases, accelerated cost reduction and expense cuts that all covered the deterioration of the domestic sales mix. More details will be explained later.
Ordinary income went up by 9.2 billion yen to 9.6 billion yen on a year-on-year basis. A foreign exchange loss derived from the gap between the current rate of 115 yen against the U.S. dollar and the forward exchange contract rate of 110 yen against the U.S. dollar was mostly covered by the appraisal gain on derivatives.
Net income reached 4.6 billion yen, a significant increase from the 1.2 billion yen in loss reported at the end of the 1st quarter of the last fiscal year, despite an increase in corporate taxes resulting from an increase in income before tax.