Hitachi Ltd. said Wednesday its operating profit sagged 39.2 percent to 180.79 billion yen ($1.74 billion) in the April-September period from a year earlier, as the coronavirus pandemic dented demand for construction machinery and metals.
But the Japanese industrial conglomerate raised its operating profit outlook for the full business year, citing a pickup in demand for building infrastructure in China.
Sales sank 10.9 percent to 3.76 trillion yen in the fiscal first-half that ended Sept. 30, as demand for construction machinery remained bleak in most markets excluding China, while sales of auto-use metals faltered during the six-month period.
Net profit soared 32.5 percent to 250.76 billion yen due to a special profit of 278.8 billion yen from the sale of its chemical unit, formerly known as Hitachi Chemical Co., to Showa Denko K.K. in the April-June quarter.
For the year through March 2021, Hitachi revised upward its operating profit projection to 400 billion yen from an earlier forecast of 372 billion yen, as demand for elevators is recovering in China.
The net profit outlook was cut to 300 billion yen from 335 billion yen due to a heavier tax burden and sales are now seen at 7.94 trillion yen, up from the previous projection of 7.88 trillion yen.
With the pandemic adding pressure on the Hitachi group, the company is stepping up restructuring efforts through selling noncore businesses.
It is considering selling all or part of its Hitachi Construction Machinery Co. and Hitachi Metals Ltd. subsidiaries to focus more on its core operations such as infrastructure and information technology businesses, according to sources familiar with the matter.
"We are studying many options," Hitachi Chief Financial Officer Yoshihiko Kawamura said during an online press conference, without elaborating on the future plans for the two group firms.
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