In reporting results for the second quarter of its financial year, ended on Sept. 30, the management of Hoya Corp. expressed disappointment with its sales of its eyeglass lenses. Their growth hovered between one and two percent in constant currencies during the period, as compared to the same quarter a year ago, below the estimated 3.5 percent growth of the global market. They declined in terms of yen, due to the appreciation of the currency.

The management mentioned “solid growth” in this segment in North America. However, the group was unable to achieve the expected growth levels in Europe. Together, Hoya Lens and Seiko made steady advances in their overall development in Europe, but intense competition in certain sectors has led to lower unit prices.

The segment's performance was weak in Brazil and other parts of Latin America. Internal organization issues in China had resulted in ongoing temporary declines in revenues earlier this year, but they ceased to fall in the second quarter. A continued deflation and contraction of the market in Japan, caused by more intense competition among retailers, had a negative effect on Hoya's strong market share in its home country.

Hiroshi Suzuki, chief executive of the group, said it must deliver slightly more consistent growth in Europe and return to the type of strong growth that he was been expecting in Asia, but pointed out that the group's lens business has not undergone any structural deterioration.

Including information technology and the other businesses in which the group is involved, Hoya has reported an overall drop in revenues of 11.8 percent in its revenues for the second quarter, down to 114.9 billion yen (€999.1m-$1,094.1m), but this was largely due to the appreciation of the yen and the effects of the earthquakes that struck the Kumamoto region in April. Excluding these two factors, sales would have gone up by nearly one percent for the group, while operating results would have risen by nearly 1.5 percent.

Net earnings declined by 8.1 percent in the quarter, but the net profit margin went up to 21.6 percent.

The group's Life Care division, which includes eyeglass lenses, contact lenses, intraocular devices, endoscopes and other products, suffered a decline of 7.3 percent in yen during the quarter, down to ¥81.57 billion (€709.5m-$777.0m). Its operating profit margin increased to 19.7 percent from 18.8 percent in the year-ago period, however.

Sales of contact lenses, which are still made for the most part in Japan through Hoya's Eyecity stores, went up, and they are expected to accelerate during the second half of the financial year, thanks in part to the opening of more stores.

The company experienced double-digit growth in revenues and higher profits in the area of intraocular lenses, where deficiencies in production capacity have started to create bottlenecks. Revenues from endoscopes were nearly flat on a currency-neutral basis.

The group's results for the first six months of its financial year were not much different. Total revenues dropped by 10.3 percent to ¥230.0 billion (€2,000.5m-$2,190.6m), resulting in a lower net profit margin of 18.6 percent. The Life Care segment showed a sales decline of 5.8 percent to ¥161.4 billion (€1,404.0m-$1,537.3m), but its operating margin improved to 19.4 percent from 18.8 percent.