Mitsubishi Electric Corporation (TOKYO:6503) announced today its consolidated financial results for the first 9 months and third quarter, ended December 31, 2021, of the current fiscal year ending March 31, 2022 (fiscal 2022).

The full document on Mitsubishi Electric’s financial results can be viewed at the following link:

www.MitsubishiElectric.com/news

1. Consolidated First 9 Months Results (April 1, 2021 – December 31, 2021)

The economy in the first 9 months of fiscal 2022, from April through December 2021, generally continued to see recovery in the corporate sector in the U.S., Europe and Japan. The household sector continued to recover in the U.S. and Europe. and recently recovered also in Japan owing to normalization of economic activities after experiencing the downward pressure stemming from the novel coronavirus diseases (COVID-19). China continued to see recovery in export and manufacturing, while the paces of recovery in the household sector slowed down. Overall, economic activities normalized due to the progress in COVID-19 vaccinations in various countries and regions, and global demand continued to expand as economy recovered owing partially to political measures. There was also the impact of material prices soaring as well as a prolonged components shortage.

Revenue

Revenue in the first 9 months increased by 240.6 billion yen from the same period of the previous fiscal year to 3,181.2 billion yen due primarily to increased revenue in Industrial Automation Systems, Home Appliances and Electronic Devices segments, despite decreased revenue in Energy and Electric Systems segment. Industrial Automation Systems segment saw an increase in the factory automation systems business due mainly to an increase in demand for capital expenditures relating to digital equipment and decarbonization worldwide. The automotive equipment business saw an increase in the first 9 months owing to recovery from the impact of COVID-19 in the first quarter, despite a decrease in and after the second quarter due mainly to a semiconductor shortage. Home Appliances segment increased due primarily to an increase in air conditioners primarily in Europe and North America, despite a decrease in air conditioners in Japan due mainly to a semiconductor shortage. Electronic Devices segment increased due primarily to recovery in demand for power modules.

Operating Profit

Operating profit increased by 52.4 billion yen from the same period of the previous fiscal year to 190.1 billion yen due mainly to increased operating profit in Industrial Automation Systems, Home Appliances and Electronic Devices segments, despite decreased operating profit in Energy and Electric Systems segment. Operating profit ratio improved by 1.3 point from the same period of the previous fiscal year to 6.0% due mainly to increased revenue.

The cost ratio improved by 1.1 point from the same period of the previous fiscal year due primarily to higher operating ratio caused by increased revenue of Industrial Automation Systems segment and the yen depreciating against other currencies, despite material prices soaring. Selling, general and administrative expenses increased by 50.3 billion yen from the same period of the previous fiscal year, but selling, general and administrative expenses to revenue ratio improved by 0.2 point. Other profit (loss) increased by 1.8 billion yen from the same period of the previous fiscal year, and other profit (loss) to revenue ratio remained substantially unchanged.

Profit before income taxes

Profit before income taxes increased by 48.8 billion yen from the same period of the previous fiscal year to 207.2 billion yen due primarily to an increase in operating profit. Profit before income taxes to revenue ratio was 6.5%.

Net profit attributable to Mitsubishi Electric Corporation stockholders

Net profit attributable to Mitsubishi Electric Corporation stockholders increased by 40.6 billion yen from the same period of the previous fiscal year to 148.4 billion yen due mainly to increased profit before income taxes. Net profit attributable to Mitsubishi Electric Corporation stockholders to revenue ratio was 4.7%.

2. Consolidated Third-quarter Results (October 1, 2021 – December 31, 2021)

Revenue

Revenue in the third quarter increased by 4.2 billion yen from the same period of the previous fiscal year to 1,042.8 billion yen due primarily to increased revenue in Industrial Automation Systems and Electronic Devices segments, despite decreased revenue in Energy and Electric Systems and Information and Communication Systems segments. Industrial Automation Systems segment saw an increase in the factory automation systems business due mainly to an increase in demand for capital expenditures relating to digital equipment and decarbonization worldwide. Meanwhile, the automotive equipment business decreased as sales of new cars decreased globally due primarily to a semiconductor shortage. Electronic Devices segment increased due primarily to recovery in demand for power modules.

Operating Profit

Operating profit decreased by 23.9 billion yen from the same period of the previous fiscal year to 52.3 billion yen due mainly to decreased operating profit in Energy and Electric Systems and Home Appliances segments, although operating profit increased in Electronic Devices and Information and Communication Systems segments. Operating profit ratio deteriorated by 2.4 point from the same period of the previous fiscal year to 5.0% due primarily to deteriorated cost ratio.

The cost ratio deteriorated by 0.7 point from the same period of the previous fiscal year due mainly to the impact of material prices soaring on Home Appliances segment and a shift in project portfolios of Energy and Electric Systems segment, despite the yen depreciating against other currencies and higher operating ratio caused by increased revenue of Industrial Automation Systems and Electronic Devices segments. Selling, general and administrative expenses increased by 17.9 billion yen from the same period of the previous fiscal year, and selling, general and administrative expenses to revenue ratio deteriorated by 1.6 point. Other profit (loss) decreased by 0.1 billion yen from the same period of the previous fiscal year, and other profit (loss) to revenue ratio deteriorated by 0.1 point.

Profit before income taxes

Profit before income taxes decreased by 23.8 billion yen from the same period of the previous fiscal year to 58.8 billion yen due primarily to a decrease in operating profit. Profit before income taxes to revenue ratio was 5.6%.

Net profit attributable to Mitsubishi Electric Corporation stockholders

Net profit attributable to Mitsubishi Electric Corporation stockholders decreased by 15.9 billion yen from the same period of the previous fiscal year to 43.6 billion yen due mainly to decreased profit before income taxes. Net profit attributable to Mitsubishi Electric Corporation stockholders to revenue ratio was 4.2%.

Forecast for Fiscal 2022

Mitsubishi Electric’s business performance for fiscal 2022 is expected to fall below the company’s previous forecast considering the impact of material prices soaring and shortages of semiconductors and other electronic components, despite changes in exchange rates in response to the yen’s depreciation. As a result, the company’s consolidated earnings forecast for fiscal 2022, ending March 31, 2022, has been revised from the announcement on October 28, 2021 as stated below.

Based on a certain premise, the company has taken into consideration the impact of improper testing, including costs for additional inspections and strengthening the quality control system. Depending on the progress of future discussions with customers and investigations, the Group may incur losses exceeding its premise or relating to the discovery of any other improper quality-related conduct. If any potential impact comes to light, it will be disclosed promptly. For more information regarding improper testing, please see “Relevant documents” of “Restoring trust: Our roadmap for reform.”

https://reform.mitsubishielectric.com/relevant-documents/

Consolidated forecast for fiscal 2022

Exchange rates in the fourth quarter of fiscal 2022 is 113 yen to the U.S. dollar, which is 3 yen weaker from the company’s previous announcement; 128 yen to the euro, which is 3 yen weaker from the company’s previous announcement; and 17.8 yen to the Chinese yuan, which is 0.8 yen weaker from the company’s previous announcement.

About Mitsubishi Electric Corporation

With 100 years of experience in providing reliable, high-quality products, Mitsubishi Electric Corporation (TOKYO: 6503) is a recognized world leader in the manufacture, marketing and sales of electrical and electronic equipment used in information processing and communications, space development and satellite communications, consumer electronics, industrial technology, energy, transportation and building equipment. Mitsubishi Electric enriches society with technology in the spirit of its “Changes for the Better.” The company recorded a revenue of 4,191.4 billion yen (U.S.$ 37.8 billion*) in the fiscal year ended March 31, 2021. For more information, please visit www.MitsubishiElectric.com

*U.S. dollar amounts are translated from yen at the rate of ¥111=U.S.$1, the approximate rate on the Tokyo Foreign Exchange Market on March 31, 2021

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