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42 HOYA Annual Report 2009
Operating Income, Ordinary Income and Net Income Each Year ended March 31
(Millions of Yen) 2005 2006 2007 2008 2009
n Operating Income 84,920 101,096 107,213 95,074 59,095
n Ordinary Income 89,525 103,638 102,909 100,175 71,081
n Net Income 64,135 75,620 83,391 81,725 25,110
(Millions of Yen)
Net Income
The cost of sales ratio rose in the fiscal year under review as sales
prices declined, resulting in the gross profit margin falling 3.6 percent-
age points, from 45.4% in the previous fiscal year, to 41.8%. Selling,
general and administrative expenses rose 5.8% to ¥130,811 million,
with the ratio of SG&A expenses to net sales rising 3.1 percentage
points, from 25.7% to 28.8%. As a result, operating income fell 37.8%,
to ¥59,095 million, and the operating margin fell 6.7 percentage
points, to 13.0%.
Major factors behind this decrease included lower profitability due
to lower sales from major divisions. In addition, the Pentax digital
camera business recorded an operating loss due to lower product
prices caused by a sudden and sharp drop in market demand and
escalating competition, resulting in operating costs that could not be
absorbed and the amortization of goodwill associated with the man-
agement integration.
Ordinary income fell 29.0% year on year, to ¥71,081 million, due in
part to a loss on equity-method investment of ¥315 million with regard
to AvanStrate Inc. (formerly NH Techno Glass Corporation) as a result
of sluggish demand in the LCD panel industry. This was despite for-
eign exchange gains of ¥7,152 million, despite the strong yen, thanks
to Hoya’s efforts to efficiently manage funds globally through multiple
foreign-currency denominations.
Net income was 69.3% lower year on year, at ¥25,110 million.
Positive contributing factors were a ¥9,705 million gain on sales of
investment securities from the partial transfer of part of Hoya’s equity
interest in an equity-method affiliate and an extraordinary gain of
¥3,200 million representing commission fees received for prior years
as a result of a review of a licensing contract. On the other hand, Hoya
recorded a ¥30,459 million asset impairment loss in each of the Pentax
divisions and others, a ¥6,743 million charge for additional retirement
benefits paid to employees in connection with business restructuring,
(%) (%)
Profit Ratios Each Year ended March 31 Profitability Each Year ended March 31
(%) 2005 2006 2007 2008 2009
Operating margin 27.6 29.4 27.5 19.7 13.0
Ordinary income ratio 29.1 30.1 26.4 20.8 15.6
Return on sales 20.8 22.0 21.4 17.0 5.5
(%) 2005 2006 2007 2008 2009
ROE 25.8 27.1 25.9 21.6 6.9
Ordinary income/
total assets 27.9 29.1 25.4 17.6 11.1
ROA 20.0 21.2 20.6 14.4 3.9
Management’s Discussion and Analysis