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euro adhoc: Fujitsu Limited
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Fujitsu Announces Revised Financial Results
Forecast for Fiscal 2003 and Resumes Dividends
Tokyo, April 22, 2004-Following a meeting of its Board of Directors today, Fujitsu Limited issued the following revised projections and guidance regarding its financial results for the fiscal year ended March 31, 2004 (FY 2003). The company now forecasts FY 2003 consolidated net income of 50 billion yen, an increase over previous projections. Unconsolidated net income is now forecast at 17 billion yen, a decrease over previous estimates. Fujitsu also announced that a fiscal year-end dividend of 3 yen per share would be paid.
Revised FY 2003 Consolidated and Unconsolidated Financial Results Forecast
Taking into account an extraordinary gain recorded in conjunction with the transfer of the substitutional portion of its employees' pension plan to the Japanese government and proceeds from the sale of fixed assets, as well as extraordinary losses relating to restructuring charges and valuation losses on affiliated companies, Fujitsu revised its projected FY 2003 financial results as follows:
FY 2003 Consolidated Financial Results Forecast (For fiscal year from April 1, 2003 to March 31, 2004)
Net Sales Operating Net Income
Previous 4,750.0 150.0 30.0
Revised 4,766.0 150.0 50.0
Increase or 16.0 0 20.0
decrease (B - A)
Percentage of 0.3 % 0.0 % 66.7 %
FY 2002 4,617.5 100.4 -122.0
FY2003 Unconsolidated Financial Results Forecast (For fiscal year from April 1, 2003 to March 31, 2004)
Net Sales Operating Net Income
Previous 2,730.0 40.0 120.0
Revised 2,788.0 33.0 17.0
Increase or 58.0 -7.0 -103.0
decrease (B - A)
Percentage of 2.1% -17.5% -85.8%
FY 2002 2,695.0 21.8 -175.0
Explanation of Revisions to FY 2003 Financial Results Forecast
Gains on Transfer of Substitutional Portion of Employees' Pension Plan
In response to the enactment of the Contributed Benefit Pension Plan Law in Japan, Fujitsu applied for an exemption from the obligation to pay benefits for future employee services related to the substitutional portion. On March 23, 2004, the company received approval of the exemption from the Minister of Health, Labor and Welfare. Applying the transitional provisions as prescribed in paragraph 47-2 of "Practical Guidelines of Accounting for Retirement Benefits - Interim Report" (Accounting Committee Report No. 13 issued by the Japanese Institute of Certified Public Accountants), Fujitsu accounted for the elimination of the future and past benefit obligations of the substitutional portion as well as the related government-specified portion of the employees' pension plan assets at the date of the approval.
As a result, for FY 2003 the company recorded an extraordinary gain of 146.5 billion yen on a consolidated basis and 81.3 billion yen on an unconsolidated basis.
Sale of Fixed Assets
In order to fund its shareholders' equity, which has been reduced over the past two years of operational restructuring, Fujitsu sold investment securities and tangible fixed assets in FY 2003. The company also securitized the land and buildings of its newly constructed Fujitsu Solution Square in Kamata, Tokyo and sold some employee fringe benefit-related real estate and other assets. As a result, on both a consolidated and unconsolidated basis, the company recognized gains of 13.6 billion yen on the sale of these assets.
Global restructuring focusing on North America Under the banner of "One Fujitsu," the company has been pursuing the development of a global business structure that can provide customers in each region with high-quality, one-stop solutions. During FY 2003, focusing primarily on restructuring of its North American operations, Fujitsu took such measures as reducing overlapping functions and personnel at its overseas operations and disposing of underperforming assets. These measures resulted in an extraordinary loss of about 75.7 billion yen on a consolidated basis (4.3 billion yen of which was booked during the first three quarters of the fiscal year).
Separately, on an unconsolidated basis, Fujitsu recorded an extraordinary loss of about 201.0 billion yen (22.8 billion yen of which was booked during the first three quarters) owing to valuation losses on subsidiaries in connection with the liquidation of its North American holding company, Fujitsu IT Holdings. With respect to consolidated accounts, operating results of its subsidiaries were already included in income in FY 2003 or earlier periods and thus not recorded as valuation losses.
Fundamental reform of domestic software and services business
In the software and services business, increasingly diverse customer requirements and a broader range of options accompanying the shift toward open standards have increased the complexity of systems development work. Moreover, constant changes in customers' business environments and quicker development turnaround times have increased project management risk. At the end of FY 2003, along with recognizing future losses relating to projects whose worsening prospects for profitability became apparent, Fujitsu carried out an exhaustive analysis of all projects under development at fiscal year-end to predict future returns, including for work not yet implemented. In this regard, the company recorded an extraordinary loss of about 68.3 billion yen on a consolidated basis, and about 64.0 billion yen on an unconsolidated basis.
Going forward, through such measures as increasing the transparency of contractual arrangements with customers and suppliers, Fujitsu will reform its business methods from the ground up, redoubling efforts to further improve customer satisfaction. In addition, along with further advancing its development technologies, the company will strive to increase awareness of income throughout the project lifecycle, thereby improving overall visibility and profitability management moving toward implementation of percentage of completion accounting.
At today's meeting of Fujitsu's Board of Directors, a planned fiscal year-end distribution of 3 yen per share was decided.
FY 2003 Year-end Dividend Forecast (For period from April 1, 2003 - March 31, 2004)
Previous Current FY2002
Forecast Forecast (actual)
Year-end undecided 3.0 yen 0.0 yen
Dividends in Recent Years
Full-year Mid-year Year-end
Dividend dividend dividend
FY 2001 5.0 yen 2.5 yen 2.5 yen
FY 2002 0.0 yen 0.0 yen 0.0 yen
FY 2003 3.0 yen 0.0 yen 3.0 yen
Fujitsu is a leading provider of customer-focused IT and communications solutions for the global marketplace. Pace-setting technologies, highly reliable computing and telecommunications platforms, and a worldwide corps of systems and services experts uniquely position Fujitsu to deliver comprehensive solutions that open up infinite possibilities for its customers' success. Headquartered in Tokyo, Fujitsu Limited (TSE:6702) reported consolidated revenues of 4.6 trillion yen (US$38 billion) for the fiscal year ended March 31, 2003. For more information, please see: http://www.fujitsu.com/.
end of announcement euro adhoc 22.04.2004
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