Konica Minolta 20% Profit Jump Driven by High Printer Demand in China

Originally written and published at asia.nikkei.com
Konica Minolta on track for 20% profit jump with printer push

Office equipment maker Konica Minolta’s operating profit is expected to climb about 20% to a little over 60 billion yen (US $557 million) this fiscal year, buoyed by a broader lineup of new products and strong printer demand in China.
Sales for the year ending March 2019 will likely rise 9% to nearly 1.1 trillion yen (US $10 billion).
In Europe, a key market with intense price competition, the Japanese manufacturer will strengthen marketing of multifunction color printers in areas where they have been slow to take root — like Eastern Europe. In China, the company expects to sell more products on the back of robust demand.
Konica Minolta plans to push its latest products with advanced network features, such as emailing and merchandise ordering, to small and midsize companies lacking system-management staff.
Lower costs are also expected to boost earnings this fiscal year, as spending related to employee retirement and warehouse reorganization is likely to drop off. Relocation of multifunction printer production to highly-automated Malaysian facilities will also enhance profitability, as will proceeds from land sales, as the company unloads idle assets.
Potential headwinds to fiscal 2018 earnings include a stronger yen, which the company predicts will stiffen from a year earlier to around 125 per euro and 105 yen per dollar. Upfront spending to expand operations of Ambry Genetics, a U.S. cancer-diagnosis company acquired last year, will also squeeze profits. But overall, positive trends will likely absorb negative factors.
For the year ended this past March, Konica Minolta’s operating profit appears to have slightly exceeded the projected 48 billion yen (US $440 million), with sales coming in a few billion yen higher than the forecast 1 trillion yen (US $9 billion). The company is set to release earnings on May 14.