TIDMFUJ
RNS Number : 3653X
Fujitsu Ld
07 February 2013
Fujitsu Limited
February 7, 2013
Notice on the Recording of Extraordinary Losses
Tokyo, February 7, 2013 - Fujitsu today announced that, for the
third quarter of fiscal 2012, it recorded extraordinary losses
stemming from restructuring expenses and other charges.
1. Consolidated Financial Results
(1) Recording of Extraordinary Losses
(Billion Yen)
Description Amount
--------------------------------------------------- -------
Restructuring
Expenses -59.1
-------
Semiconductor Business -57.0
-------
Loss on transfer of production
facilities -33.1
Impairment loss on standard
logic device production
facility -23.9
------------------------------------------------- -------
Business Outside Japan and
Other -2.0
---------------------------------- -------
Impairment
Losses -28.0
-------
Impairment losses on goodwill
and other assets related
to a business outside Japan -28.0
---------------------------------- -------
Major Items in Extraordinary Losses
Restructuring Expenses for the Semiconductor Business
Stemming from the implementation of structural reforms to its
semiconductor business, Fujitsu recorded 57.0 billion yen in
restructuring expenses (consisting of a 33.1 billion yen loss on
the transfer of production facilities and a 23.9 billion yen
impairment loss on its production facility for standard devices).
The loss on the transfer of production facilities consists of
guarantees for operating costs in the Iwate Plant and the LSI
assembly and testing facility that were transferred,
personnel-related expenses arising from the transfer of the LSI
assembly and testing facility, impairment losses, and other items.
The impairment loss on the production facilities of standard logic
devices, for which capacity utilization rates have been declining,
such as the Mie Plant's 200mm line and the 200mm line located in
the Aizu-Wakamatsu region.
Fujitsu's semiconductor business shifted to a "fab-lite"
business model in 2009, when it decided to outsource the mass
production of 40nm generation logic devices to Taiwan Semiconductor
Manufacturing Company Limited (TSMC) and formed a partnership with
TSMC in advanced process technology for 28nm generation devices and
beyond. Due to rapid changes in the market, however, it has been
facing an extraordinarily severe operating environment. As a
result, Fujitsu has decided to restructure this business.
Specifically, it is considering transferring the Mie Plant's 300mm
line to a new foundry company that it is planning to establish with
TSMC. It is also considering integrating its system LSI device
business with that of Panasonic Corporation in a new fabless
company they would establish with the equity participation of
third-party investors. For further details, please refer to two
announcements released today, "Fujitsu Announces Restructuring and
New Direction of its Semiconductor Business," and "Fujitsu and
Panasonic to Consolidate System LSI Businesses in New Company."
Impairment Losses on Goodwill and Other Assets related to a
Business outside Japan
Fujitsu recorded impairment losses of 28.0 billion yen as an
extraordinary loss on the remaining unamortized balance of goodwill
and other intangible assets recorded at the time it acquired
Fujitsu Technology Solutions (Holding) B.V. (and its consolidated
subsidiaries; FTS), a European subsidiary. As a result of the
prolongation of the recession in Europe and the intensification of
price competition in PCs and x86 servers, Fujitsu now anticipates
that it will not be able to achieve its original plan, formulated
in April 2009, at the time it acquired the remaining shares in FTS,
of recouping its investment over a period of ten years.
In April 2009, Fujitsu converted FTS, which had been an
equity-method affiliate, into a wholly owned subsidiary. Fujitsu
then moved forward with the global expansion of its business in x86
servers and other hardware products. At the same time, to maximize
the synergy between FTS and its UK subsidiary Fujitsu Services
Holdings PLC (and its consolidated subsidiaries; FS), Fujitsu
promoted the optimization of its resources in Europe through such
measures as restructuring the operations of the FTS Group and the
FS Group in respective regions of Europe.
Both before and after becoming a wholly owned subsidiary, FTS
had implemented structural reforms, and it had consistently
recorded operating profits until the previous fiscal year. Due to
the recession in Europe, however, FTS's earnings environment has
dramatically deteriorated, with price competition intensifying
beyond levels that had been imagined at the time FTS was acquired,
primarily in the hardware product business, and it is anticipated
that FTS will record an operating loss for fiscal 2012. To improve
FTS's earnings, a reduction in its workforce is being considered,
and there are also plans to shift its structure from a business
primarily focused on hardware products to one focused on services
and solutions business, with the hardware products business at its
base.
(2) Impact on Future Consolidated Financial Results
In the fourth quarter, as well, Fujitsu expects to record
extraordinary losses of 83.0 billion yen on restructuring expenses,
including for personnel-related expenses in and outside of Japan.
For further details, please see Fujitsu's financial results for the
third quarter of fiscal 2012, which were released today.
2. Unconsolidated Financial Results
(1) Recording of Extraordinary Losses
(Billion Yen)
Description Amount
--------------------------------------------- -------
Total valuation losses on investments
in affiliates for the third quarter of
fiscal 2012
(October 1, 2012 - December 31, 2012)
(= a - b) -248.2
-------
(a) Total valuation losses on investments
in affiliates for the first nine months
of fiscal 2012 (April 1, 2012 - December
31, 2012 -248.2
-------------------------------------------- -------
(b) Total valuation losses on investments _
in affiliates for the first six months
of fiscal 2012 (April 1, 2012 - September
30, 2012
-------------------------------------------- -------
Major Items in Extraordinary Losses
Semiconductor Subsidiary: Fujitsu Semiconductor Limited
As a result of deterioration in its financial performance,
Fujitsu recorded a valuation loss of 165.4 billion yen on the
subsidiary's stock due to the value of the Company's net assets
falling below 50% of the book value of Fujitsu's investment, and
because the estimated value from the recovery of net assets within
roughly a 5-year period is less than the book value of its
investment.
European Subsidiary: Fujitsu Technology Solutions (Holding)
B.V.
As a result of deterioration in its financial performance,
Fujitsu recorded a valuation loss of 82.4 billion yen on the
subsidiary's stock due to the erosion of the Company's excess
earnings generation capacity envisioned at the time of its
acquisition, and because the estimated value from the recovery of
net assets within roughly a 5-year period is less than the book
value of its investment.
(2) Impact on Future Unconsolidated Financial Results
In the fourth quarter, as well, further structural reforms of
the semiconductor business will be undertaken, leading to the
possibility that further valuation losses on the shares of Fujitsu
Semiconductor Limited will be generated.
Starting in fiscal 2013, the UK subsidiary Fujitsu Services
Holdings PLC (FS) will adopt revised accounting standards for
retirement benefits. It is expected that FS's net assets will
decline because of recognition of retirement benefit obligations,
previously unrecognized, in net assets net of tax effects. After
completing the pension actuarial calculations at the end of fiscal
2012, assuming the estimated value from the recovery of the
subsidiary's net assets within roughly a 5-year period is less than
the book value of Fujitsu's investment, Fujitsu is considering
recording a valuation loss of approximately 100.0 billion yen on
the subsidiary's stock at the end of fiscal 2012.
These materials may contain financial projections and other
forward-looking statements that are based on information currently
possessed by Fujitsu and certain views and assumptions that are
considered to be reasonable. Actual results may differ materially
from those projected or implied in the forward-looking statements
due to a variety of factors.
Press Contacts
Fujitsu Limited
Public and Investor Relations Division
Inquiries:
https://www-s.fujitsu.com/global/news/contacts/inquiries/index.html
About Fujitsu
Fujitsu is the leading Japanese information and communication
technology (ICT) company offering a full range of technology
products, solutions and services. Over 170,000 Fujitsu people
support customers in more than 100 countries. We use our experience
and the power of ICT to shape the future of society with our
customers. Fujitsu Limited (TSE:6702) reported consolidated
revenues of 4.5 trillion yen (US$54 billion) for the fiscal year
ended March 31, 2012. For more information, please see
http://www.fujitsu.com.
All company or product names mentioned herein are trademarks or
registered trademarks of their respective owners. Information
provided in this press release is accurate at time of publication
and is subject to change without advance notice.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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