The ophthalmic lens segment of Hoya Corporation's life care division saw its sales decline by 3 percent in the 3rd quarter ended Dec. 31. The company booked higher deliveries of lenses in Japan as well as in the rest of the world, but suffered from lower unit sales prices in the domestic market and from the sharp appreciation of the yen against other currencies.
In terms of local currencies, revenues grew in this segment by 8 percent in Europe and at a double-digit rate in the U.S. Sales continued to increase in France, where Hoya has doubled its market share to 15 percent in the past five years, and in Germany. They enjoyed a recovery in some Scandinavian and Eastern European market, but it's still a struggle in Spain and in some other European markets. Company officials indicate that price competition is apparently fading out in Japan.
Spectacle lenses constitute the bulk of Hoya's former vision care division. Charts supplied by the company to analysts point to an improvement in the operating margin of this business segment to 20.6 percent on sales of 26.6 billion yen (€235.0m-$317.4m) in the last three months of 2010 from 19.7 percent on sales of ¥24.7 billion in the same period a year earlier.
The total revenues of the life care division, which also includes contact lenses, intraocular lenses, endoscopes and artificial bones, rose by 1.9 percent to ¥50.5 billion (€446.1m-$602.6m), but they would have been ¥400 million higher if currency exchange rates had remained the same. The division's operating margin improved to 20.4 percent from 19.4 percent in the same quarter a year ago. Domestic sales accounted for 43.7 percent of the total turnover, up from 41.1 percent.
Hoya's sales of intraocular devices rose by 10 percent, in spite of the appreciation of the yen, with good growth also in Europe and other parts of the world. Its sales of contact lenses, which are still mainly in Japan, went up by 11.7 percent, fueled by a higher price mix and by an increasing number of customers visiting its Eyecity shops, whose network expanded by 10 percent.
In Japan, the company claims market shares for contact lenses of 18 percent excluding internet sales and more than 30 percent in specialty retail. It plans to release soon bifocal lenses and special lenses for aged eyes, both as contact lenses and as intraocular devices.
The total consolidated net sales of the group inched up in the latest quarter by 1.5 percent to ¥108.4 billion (€957.5m-$1,293.6m) and its net income went up by 12.0 percent to ¥13.2 billion (€116.6m-$157.5m). Gains in the semiconductor business and in lenses for digital cameras, especially in emerging markets, were offset by the appreciation of the yen, which reduced total sales by ¥5.5 billion (€48.6m-$65.6m) and net income by ¥580 million (€5.1m-$6.9m) .
For the first nine months of the financial year, Hoya's net profit was up by 81.3 percent to ¥47.1 billion (€416.0m-$562.1m) on 4.0 percent higher revenues of ¥321.1 billion (€2,837.2m-$3,833.1m). Life care revenues rose by 1.5 percent in the nine-month period to ¥150.4 billion (€1,328.5m-$1,794.8m), generating a slightly improved operating margin of 19.5 percent.
For the full year, the management is projecting increases of 50.5 percent in net income and 2.3 percent in consolidated net sales. After the recent takeover of Pentax, further mergers and acquisitions are envisaged in the medium term to consolidate the structure of the group's life care division.