Hoya is transferring some of its European lens production to its super-laboratory in Thailand. As part of this move, the company has eliminated about 10 percent of its 400-odd jobs in its vision care operations in the U.K. and placed one-fourth of its staff in Germany, where its facilities are older, on shorter working hours.

Hoya Lens Deutschland has announced that it is placing about 100 employees at its head office in Mönchengladbach on shorter working hours for six months, indicating that the decision was made because of a drop in demand outside the country. The company has a staff of around 400 people at three different sites in Germany.

The announcement came a few days after Rodenstock announced a similar move, confirming press reports. We erroneously reported in the last issue that 680 out of its 1,625 employees in Germany were going to be laid off temporarily for at least six months, but in reality they have been placed on shorter hours, like those of Hoya.

During its fourth quarter ended March 31, Hoya's vision care division has reported a drop in turnover of 20.2 percent to ¥24.7 billion (€186.8m-$254.4m), with a 13.3 percent drop in Japan and a 22.5 percent decline outside the domestic market. The operating income grew by 12.7 percent to ¥4.9 billion (€37.1m-$50.5m), for an operating margin of 19.7 percent, sharply up from the 13.9 percent ratio obtained in the same period a year ago.

Price declines in the market hurt sales of Hoya's ophthalmic lenses in Japan. Outside Hoya's domestic market, revenues were affected by a strengthening yen, the global economic slowdown, and competition from lower-priced suppliers.

In terms of yen, quarterly sales of eyeglass lenses went down by 9.1 percent in the U.S., by 24.4 percent in the U.S. and by 35.3 percent in Asia outside Japan. In terms of local currencies, European sales were soft in the U.K. and in the Nordic countries, but the company scored well in France, Italy and, to a lesser extent, in Spain. Continued growth was recorded in Eastern European countries such as Poland and Hungary.

For Hoya's health care division, revenues in Japan increased by 6.4 percent and abroad by 14.8 percent, with total growth of 6.8 percent.

For the full financial year, the vision care division posted a sales increase of between 2 and 3 percent in Europe and essentially flat sales in the U.S. in terms of local currencies. In yen, the segment's global net sales declined by 12.4 percent to ¥110.7 billion (€837.1m-$1,140.1m), with drops of 11.7 percent in Japan, 12.3 percent in the U.S., 6.5 percent in Europe and 12.3 percent in the rest of Asia Operating income increased by 5.6 percent to ¥21.8 million (€164,800-$224,500), again reaching an improved margin of 19.7 percent, up from 16.4 percent in the previous year. For the fiscal year, vision-care sales dropped by 13.4 percent in Japan and by 12.0 percent abroad.

Currency effects hurt Hoya Corporation even more as a group in its fourth quarter ended March 31, with sales plunging by 38.9 percent to ¥82.9 billion (€626.8m-$853.8m) because of the appreciation of the yen along with a drop in product prices in its main business fields such as electro-optics.

The group thus recorded an unusual operating loss for the three months of ¥60 million (€453,700-$618,000), compared with income of ¥18.0 billion for the same period of 2008. The bottom line was a net loss of ¥27.8 billion (€210.2m-$286.3m) against net income of ¥21.0 billion. The gross profit margin fell by 6.7 percentage points to 36.0 percent.

For the full year, the group's revenues were down by 5.7 percent to ¥454.1 billion (€3,433.7m-$4,676.9m), with operating income falling by 37.8 percent to ¥59.0 billion (€446.1m-$607.7m). Net income for 2008 dropped by 69.3 percent to ¥25.1 billion (€189.8m-$258.5m). This included impairment losses for fixed assets, with total extraordinary losses of ¥30.5 million (€230,600-$314,100).

The company noted that many high-tech manufacturers made a drastic inventory adjustment in the second half of the year. For the near future, Hoya plans to expand by generating stable profit from electro-optics without having to invest a great deal, as well as growing in its medical business including eye care in an attempt to increase market share. It said it was looking at a new business opportunity to add to its portfolio.

Hoya noted that its subsidiary Hoya Lens Deutschland had received a statement of objections regarding its ophthalmic lens business from the Federal Cartel Office of Germany in December.

At a board meeting at the end of April, Hoya decided to propose at its annual shareholders' meeting in June to issue stock warrants as stock options to employees, as well as to directors and employees of its affiliated companies. A maximum of 5,000 warrants will be issued, and they will be common shares with 400 per each warrant, for a maximum number of 2 million shares.