Investing in Japan: Denso Corp’s financial results for FY2019

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Denso affected by COVID-19 and recall costs


On April 30, Denso Corp, a key supplier to Toyota Motor, announced its consolidated financial results for the year ending March 2020. 

 According to the announcement, net income was 68 billion yen, a 73% decrease from the previous year. Recall costs of automobile parts increased amid falling production and operating efficiency due to the spread of new coronavirus infections. 
Denso Corp’s financial results for FY2019

 Revenue decreased 4% to 5,153.4 billion yen. Plummeting production by automobile makers dragged down Denso’s sales. 
Denso Corp’s financial results for FY2019

 Operating profit fell 81% to 61 billion yen. In spite of efforts to streamline production and reduce costs, operating costs decreased approximately 43 billion yen caused by declining operating rate. 

 Furthermore, large scale recall costs of fuel pump parts used in Toyota automobiles damaged the results by about hefty 222 billion yen, more than five times of impact given by COVID-19. 

 The full-year consolidated financial forecast for the fiscal year ending March 31, 2021 has not been disclosed in this announcement because the company cannot calculate reasonably how the spreading new coronavirus infection will affect its financial results in 2021.

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