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Konica Minolta profit seen down 30% for April-September

Konica Minolta is enjoying growing sales of large printers used by businesses to make pamphlets and other documents.

TOKYO -- Konica Minolta's group operating profit apparently slid 30% on the year for the six months ended September as the yen gained strength against such currencies as the euro.

The Japanese manufacturer of display and office technology likely logged a little over 18 billion yen ($171 million) in black ink, short of the roughly 22 billion yen average prediction in the QUICK Consensus survey of analysts. The figure looks to have missed undisclosed internal forecasts as well.

Foreign exchange effects account for much of the drop. Around 30% of Konica Minolta's total sales come from Europe, meaning that for every 1 yen that the Japanese currency strengthens against the euro, operating profit is weighed down by 800 million yen over the course of a year. From April to September, 1 euro fetched around 118 yen on average, or 17 less than a year earlier. The Japanese currency also gained value against the pound and such emerging-market currencies as the yuan.

Certain major transactions also are thought to have been pushed into the second half of the fiscal year, impacting first-half performance.

Operating profit in the multifunction-printer-related business apparently climbed when foreign exchange effects are ignored. Konica Minolta is retooling business technology operations to focus on these devices, which continue to draw healthy demand even as the copier market matures.

New offerings and a focus on hybrid sales, in which the devices are packaged with information technology systems, helped raise the value of individual orders. This countered downward pressure on segment profit following a roughly 3 billion yen boost a year earlier from the sale of property.

Such acquisitions as an American provider of health care IT systems and a maker of LCD-testing equipment in the year ended March 31 began to pay off as well, bolstering profit for such operations as health care.

Profit fell in the industrial business segment, which deals largely with films for liquid crystal displays. Konica Minolta's strength lies in products for vertical-alignment LCD panels. But in-plane-switching displays have recently come to prominence. Konica Minolta has worked since spring to strengthen sales of products for IPS panels, apparently leading to a narrower profit decline for the July-September quarter than for April to June.

The company will release first-half earnings Monday and is expected to maintain its forecast of operating profit dropping 8% to 55 billion yen in the year ending March 2017.

(Nikkei)

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