Mitsubishi Electric Announces Consolidated Financial Results for the First Half and Second Quarter of Fiscal 2023

Mitsubishi Electric Corporation (TOKYO:6503) announced today its consolidated financial results for the first half and second quarter, ended September 30, 2022, of the current fiscal year ending March 31, 2023 (fiscal 2023).

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, 2022 – September 30, 2022)

The economy in the first half of fiscal 2023, from April through September 2022, generally continued to see recovery in the corporate and household sectors in the U.S. In China, there was downward pressure due to the impact of lockdown caused by the expansion of COVID-19, and the pace of subsequent recovery stayed slow. In Japan, gradual recovery continued primarily in the household sector. In Europe, the paces of recovery were even slower in the corporate and household sectors. There was also the impact of the rise in some material prices and high logistics costs, as well as the prolonged electronic components shortage.

Revenue

Revenue increased by 201.1 billion yen year-on-year to 2,339.5 billion yen owing primarily to the weaker yen, despite a decrease in revenue in the Infrastructure segment. The Life segment saw an increase in the building systems business in Asia and Japan, and the air conditioning systems & home products business also increased due mainly to a recovery in demand for air conditioners in Asia (excluding China), Europe and Japan. The Industry and Mobility segment saw an increase in the factory automation systems business due mainly to an increase in global demand for capital expenditures related to digital equipment and decarbonization, and the automotive equipment business also increased due to robust demand for electric vehicle-related equipment. The Business Platform segment saw an increase in the information systems & network service business due mainly to increases in the IT infrastructure service and the system integrations businesses. The semiconductor & devices business also increased due to robust demand for power modules and optical communication devices.

Operating profit

Operating profit decreased by 57.3 billion yen year-on-year to 80.5 billion yen due mainly to decreases in the Life segment, the Infrastructure segment and the Industry and Mobility segment, despite an increase in the Business Platform segment. Operating profit ratio decreased by 3.0 points year-on-year to 3.4% due mainly to deteriorated cost ratio.

The cost ratio deteriorated by 2.3 points year-on-year despite the improvement owing to the weaker yen, as there was the impact of the rise in some material prices, the Life segment deteriorated due to the lower production level caused by the rise in logistics costs and the electronic components shortage, and the profitability of the Infrastructure segment also deteriorated. Selling, general and administrative expenses increased by 62.0 billion yen year-on-year, and the selling, general and administrative expenses to revenue ratio deteriorated by 0.7 points year-on-year. Other profit (loss) and other profit (loss) to revenue ratio remained substantially unchanged year-on-year.

Profit before income taxes

Profit before income taxes decreased by 45.2 billion yen year-on-year to 103.1 billion yen due primarily to a decrease in operating profit. The profit before income taxes to revenue ratio was 4.4%.

Net profit attributable to Mitsubishi Electric Corporation stockholders

Net profit attributable to Mitsubishi Electric Corporation stockholders decreased by 30.0 billion yen year-on-year to 74.8 billion yen due mainly to a decrease in profit before income taxes. The net profit attributable to Mitsubishi Electric Corporation stockholders to revenue ratio was 3.2%.

2. Consolidated Second-quarter Results (July 1, 2022 – September 30, 2022)

Revenue

Revenue increased by 199.9 billion yen year-on-year to 1,271.8 billion yen owing primarily to the weaker yen. The Life segment saw an increase in the building systems business due to an increase in Asia and Japan, and the air conditioning systems & home products business also increased due mainly to a recovery in air conditioners in Japan, North America and Asia. The Industry and Mobility segment saw an increase in the factory automation systems business due to an increase in global demand primarily for capital expenditures related to digital equipment and decarbonization, and the automotive equipment business increased due to an increase in sales of new cars globally year-on-year, particularly in China and India, and robust demand for electric vehicle-related equipment. The Business Platform segment saw the information systems & network service business remaining substantially unchanged year-on-year, and the semiconductor & device business increased due mainly to robust demand for power modules and optical communication devices. The Infrastructure segment saw a decrease in the energy systems business, while the public utility systems business remained substantially unchanged year-on-year and the defense & space systems business increased.

Operating profit

Operating profit decreased by 8.5 billion yen year-on-year to 46.5 billion yen due mainly to decreases in the Infrastructure segment and the Life segment, despite increases in the Business Platform segment and Industry and Mobility segment. Operating profit ratio decreased by 1.4 points year-on-year to 3.7% due mainly to deteriorated cost ratio.

The cost ratio deteriorated by 2.0 points year-on-year despite the improvement owing to the weaker yen, as there was the impact of the rise in some material prices, the profitability of the Infrastructure segment deteriorated, and the Life segment also deteriorated due to the rise in logistics costs. Selling, general and administrative expenses increased by 40.4 billion yen year-on-year, but the selling, general and administrative expenses to revenue ratio improved by 0.5 points year-on-year. Other profit (loss) increased by 0.4 billion yen and other profit (loss) to revenue ratio improved by 0.1 points year-on-year.

Profit before income taxes

Profit before income taxes decreased by 2.6 billion yen year-on-year to 56.2 billion yen due primarily to a decrease in operating profit. The profit before income taxes to revenue ratio was 4.4%.

Net profit attributable to Mitsubishi Electric Corporation stockholders

Net profit attributable to Mitsubishi Electric Corporation stockholders decreased by 1.6 billion yen year-on-year to 41.3 billion yen due mainly to a decrease in profit before income taxes. The net profit attributable to Mitsubishi Electric Corporation stockholders to revenue ratio was 3.2%.

Forecast for Fiscal 2023

The consolidated earnings forecast for fiscal 2023, ending March 31, 2023, has been revised from the announcement on July 28, 2022, as stated below. Revenue is expected to exceed the previous announcement due to foreign exchange rates reconsidered in line with the weaker yen and passing rising components procurement costs onto prices. Forecasts for profits remain unchanged from the previous announcement due primarily to the rise in material prices and logistics costs, semiconductor and electronic components shortages and lower profitability in the Infrastructure segment.

Exchange rates in and after the third quarter of fiscal 2023 are 135 yen to the U.S. dollar, which is 15 yen weaker than the previous announcement; 135 yen to the euro, which is 5 yen weaker than the previous announcement; and 19.0 yen to the Chinese yuan, which is 1 yen weaker than the previous announcement.

About Mitsubishi Electric Corporation

With more than 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 “Changes for the Better.” The company recorded a revenue of 4,476.7 billion yen (U.S.$ 36.7 billion*) in the fiscal year ended March 31, 2022. For more information, please visit www.MitsubishiElectric.com

*U.S. dollar amounts are translated from yen at the rate of ¥122=U.S.$1, the approximate rate on the Tokyo Foreign Exchange Market on March 31, 2022

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