Minebea Reports First Half 2006 Results

Minebea Co. Ltd. (Japan; TSE:6479) reported fiscal first half 2006 financial results, for the period ended September 30, 2005. Sales for the half were up more than 6%, to ¥ 155.7 billion (USD $1.3 billion) from 2004's level of ¥ 146.8 billion ($1.2 billion) Net income more than doubled, rising 122% to ¥ 2.4 billion ($20.4 million) from ¥ 1.1 billion ($9.3 million). Minebea is an industrial manufacturing and distribution conglomerate, made up of 47 companies operating in two business units -- Machined Components and Electronic Devices and Components. Bearing manufacturing and sales operations are contained in its Machined Components Business. The bearing manufacturing operations are Minebea Co. Ltd., New Hampshire Ball Bearings Inc., NMB-Minebea UK Ltd., NMB Singapore Ltd., Pelmec Industries Ltd., NMB Thai Ltd., Pelmec Thai Ltd., NMB Hi-Tech Bearings Ltd., and Minebea Electronics & Hi-Tech Components Ltd. Bearings also have ten dedicated sales operations, ranging from North America to Europe to Asia, Hong Kong and Korea. Minebea said during the period, "sales of ball bearings to makers of automobiles and information & telecommunications equipment stayed strong year-on-year, owing to our vigorous sales expansion efforts. Also, sales of rod end bearings rose, mainly in the U.S. and Europe for the aerospace industry. In pivot assemblies, sales grew significantly owing to strong demand from the hard disk drive industry." "As a consequence," said Minebea, "net sales rose ¥ 4.854 billion (8.5%) compared with a year earlier, to ¥ 62.204 billion. Operating income, although adversely affected by soaring raw materials prices, also increased ¥ 634 million (6.1%) year-on-year, to ¥ 11.112 billion, owing to positive business factors, including cost reductions from increased production and improvements to production efficiency." Geographically, Minebea reported bearing sales in Asia continued at a high growth rate, particularly in the Greater China region. The two-edged sword of price increases and cost reductions helped the region record a 9.3% increase in sales, but 102% increase in profits. North American sales of ball bearings produced locally, along with rod end bearings experienced brisk sales to aviation-related and other industries. North American operations saw sales rise 11% from 2004, while operating income fell 34%, partly due to import purchase price changes. The European market saw sales of ball bearings, rod end bearings and other products firm as moderate economic growth drove the region. Looking forward, Minebea said it will continue to aggressively expand sales of "mainstay" ball bearings in strong demand by electrical appliance manufacturers, automakers and information & telecommunications equipment manufacturers. Further, the company said it expects continued benefits from economies of scale as sales increase, including ramping up rod end sales into a strong aircraft market in North America and Europe.