Bloomberg News

Olympus Operating Profit Declined in First Fiscal Half

November 17, 2011

(Corrects debt repayment in ninth paragraph.)

Nov. 17 (Bloomberg) -- Olympus Corp., the Japanese camera maker that admitted hiding losses for decades, said it had lower operating profit in the first fiscal half compared with a year earlier as sales declined.

The company had a 16.9 billion yen ($220 million) operating profit in the six months ended Sept. 30, compared with 19.8 billion yen in the year earlier period, according to a report the camera maker revealed to creditor banks yesterday and released through the Tokyo Stock Exchange today.

Olympus, which is being investigated for accounting irregularities, said it plans to release its full earnings for the fiscal second quarter by Dec. 14 after the report is reviewed by auditors. The company was placed on a watch list for a possible delisting by the Tokyo Stock Exchange last week after saying it would miss a deadline to file earnings.

The company, also the world’s largest endoscope maker, had sales of 416 billion yen during the fiscal first half, compared with 419 billion yen a year earlier, according to the report.

Olympus last week said it hid investment losses from the 1990s using inflated fees paid to advisers for the 2008 acquisition of the U.K. medical-device maker Gyrus and three other takeovers in Japan.

Nippon Life Insurance Co., Olympus’s largest shareholder, and its subsidiary Nissay Asset Management Corp. cut their combined stake in Olympus to 5.11 percent from 8.18 percent, according to a filing with Japan’s finance ministry today.

Debt Pledge

Olympus yesterday pledged to Mitsubishi UFJ Financial Group Inc. and other banks that it would cut debt by 256.6 billion yen, according to the report, to help win support from banks.

The company said it will reduce interest-bearing debt to 408.7 billion yen by March 2015, from 665.3 billion yen at the end of September.

Olympus needs to pay or refinance 30 billion yen of debts next year, according to data compiled by Bloomberg. That will increase to 77.5 billion yen the following year, the data show.

The company’s shares rose 1 percent to 747 yen as of the 3 p.m. end of trading on the Tokyo Stock Exchange. They have tumbled 70 percent since Michael C. Woodford was fired as president on Oct. 14 after he questioned acquisition payments made by the company.

Olympus’s accounting violations show the need for increased transparency among Japanese companies, a member of the ruling party’s new task force on corporate governance said earlier this week.

A decision on delisting will be made based on issues such as the size of the misstated accounts, the extent of wrongdoing and loss of confidence in the company, Yukari Hozumi, a senior associate for corporate strategy at the exchange, said by telephone yesterday.

--Editors: Ken McCallum, Ben Richardson

To contact the reporter on this story: Chris Cooper in Tokyo at ccooper1@bloomberg.net

To contact the editor responsible for this story: Ben Richardson at brichardson8@bloomberg.net


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