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Investing.com -- Konica Minolta reported a significant profit increase in its first quarter despite lower sales, as structural reforms and cost-cutting measures boosted the bottom line.
The company posted sales of ¥251.2 billion for the quarter, down 8.2% year-over-year, with a 4% decline when excluding foreign exchange effects. The Japanese yen’s appreciation reduced sales by approximately ¥12 billion.
Business contribution profit surged 411% to ¥9.2 billion, representing a ¥7.4 billion increase from the same period last year. Excluding forex effects, profit improved by ¥9.2 billion, as currency fluctuations had a negative ¥1.8 billion impact on operating profit.
The profit figure exceeded the company’s internal estimates by ¥1-2 billion and significantly outperformed market expectations of ¥4.0 billion in operating profit.
Cost-saving measures from structural reforms contributed ¥5.7 billion to the profit improvement, while reductions in other selling, general and administrative expenses added ¥8.6 billion. These gains helped offset a ¥4.2 billion negative impact from lower sales and a ¥1.6 billion increase in labor costs.
By segment, the Digital Workplace business recorded sales of ¥138.9 billion, down 9% year-over-year (4% excluding forex effects), with both hardware and non-hardware sales declining 4%. Despite lower sales, the segment’s business contribution profit increased by ¥600 million to ¥7.4 billion, driven by structural reforms and SG&A expense reductions.
The Professional Print business reported flat sales of ¥64.3 billion when excluding currency effects, with business contribution profit decreasing by ¥400 million to ¥1.4 billion. The Industry business saw sales decline 5% to ¥28.7 billion, while business contribution profit increased by ¥500 million to ¥4.3 billion.
Konica Minolta also revised its estimate of tariff impact for the fiscal year from ¥16.0 billion to ¥14.0 billion, noting it can offset this pressure through price adjustments, SG&A expense reductions, and favorable changes in foreign exchange assumptions.
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