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Canon reports $A1 billion+ operating profit in Q2

Canon’s second quarter 2022 results showed year-on-year sales growth of 13.3% to ¥998.8 billion ($A10.5bn), with operating profit of ¥98.5 billion ($A1.04bn), a year-on-year increase of 27.4%. Sales for the Printing Business Unit increased by 15.9%.

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canon log 623“Looking back at the second quarter of 2022, personal consumption maintained a recovery trend, due to easing of restrictions on economic activities,” said Canon Inc in a statement from Tokyo. “On the other hand, in addition to the global shortage of semiconductors, logistical constraints continued, due to the prolonged Ukraine crisis and lockdowns in China, and inflation accelerated." 

In the markets in which Canon operates, despite the ongoing shortage of semiconductor chips and supply chain disruptions, demand remained firm, the company said. 

“Demand for office multifunction devices (MFDs) and laser printers continued to recover. For inkjet printers, demand in home use remained solid. For FPD (Flat Panel Display) lithography equipment, capital investments from panel manufacturers remained solid.

“Despite the ongoing shortage of semiconductor chips and supply chain disruptions due to lockdowns in China, Canon prioritized product supply by maximizing production, which was achieved by switching to alternative parts and developing business with new component suppliers. 

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 “Net sales for the second quarter increased by 13.3% year-on-year to ¥998.8 billion due to the price adjustment of products and depreciation of the yen. Net sales for the first half of the year increased by 8.9% year-on-year to ¥1,878.1 billion. Gross profit as a percentage of net sales decreased by 0.9 points to 46.5% due to the increase in the ratio of hardware caused by stabilization of production supply including printers, in addition to the increased costs of parts and logistics. 

“However, second-quarter gross profit increased by 11.1% year-on-year to ¥464.0 billion due to the depreciation of the yen mainly. Operating expenses increased by 7.4% year-on-year to ¥365.5 billion as a result of an increase in operating expenses denominated in foreign currencies due to the depreciation of the yen, despite focused expenses to important activities even as sales activities increased. As a result, operating profit increased by 27.4% year-on-year to ¥98.5 billion.”

Results by Segment

In the Printing Business Unit, demand for office MFDs recovered, Canon reported. “However, unit sales decreased compared with the previous year due to the shortage of semiconductor chips. Revenue of services and consumables were at the same level compared with the previous year. As for laser printers, unit sales increased significantly compared with the previous year due to stagnant production activities in the previous year in addition to a recovery in demand for office use. For inkjet printers, unit sales of both Cartridge Printers and Refillable Ink Tank Printers far exceeded those of the same period of the previous year due to solid global demand. 

“For equipment in the production printing market, unit sales increased compared with the previous year due to strong sales of the varioPRINT iX series of high-speed sheet-fed colour inkjet presses. These factors resulted in total sales for the business unit of ¥567.5 billion, a year-on- year increase of 15.9%, while income before income taxes increased by 6.9% year-on-year to ¥70.5 billion, due to price adjustment of products despite the increased costs of parts and logistics. 

“As for the Industrial and Others Business Unit, regarding semiconductor lithography equipment, unit sales increased compared with the previous year as a result of maximizing production capacity amid strong sales for a wide range of products such as memory and logic. For FPD lithography equipment, unit sales decreased compared with the previous year, when the business unit caught up with delayed equipment installation, although capital investments by panel manufacturers remained solid. For OLED display manufacturing equipment, sales decreased compared with the previous year as panel manufacturers were in the midst of considering investment plans in response to diversifying OLED panel applications. These factors resulted in total sales for the business unit of ¥143.7 billion, a year-on-year increase of 4.1%.

Outlook

“The outlook for the global economy from the third quarter onwards is expected to maintain a recovery trend. However, it remains uncertain, with risks such as delays in the supply of semiconductor chips, the constraints in international freight transport due to high demand, the prolonged Ukraine crisis and further acceleration of inflation.”

More details here.