Hoya Corp. reported a 12 percent increase in its sales of eyeglass lenses for the fourth quarter of its financial year, ended on March 31, but they grew by 2 percent on a comparable basis. Sales of these products saw declines of around 2 percent in both Japan and Europe. They rose by between 5 and 7 percent in the Asia-Pacific region, and by between 6 and 7 percent in the Americas.
The company's management blamed “fairly aggressive sales strategies” by competitors for the sales decline in Europe. It said it plans to revisit its strategy in the mature European market because it accounts for a large proportion of its sales in this segment.
Profit margins improved “dramatically” in the ophthalmic lens segment, said Hoya, adding that the company wants to further improve the efficiency of its sales activities in this area in order to reach an average profit ratio of 20 percent in Life Care for the present financial year.
The Life Care division, which also covers contact lenses, intraocular devices and endoscopes, recorded an overall sales increase of 10 percent to 91.9 billion yen (€721.6m-$834.6m) in the quarter, and its operating margin grew by four full percentage points to 19.7 percent, as compared to the year-ago period.
The sales increase for the division was only 2 percent on a comparable basis. Sales went up by 5 percent for contact lenses and 14 percent for intraocular devices, but they were off by one percent for endoscopes.
The group's total revenues increased by 8 percent to 135.9 billion yen (€1.1bn-$1.2bn) in the fourth quarter, up by 7 percent in local currencies. The operating profit grew by 23 percent, thanks in particular to the margin expansion in the Life Care division, but impairment charges related to Hoya's Brazilian subsidiary led it to post an increase in net profit of only 3 percent to ¥19.5 billion (€153.1m-$177.1m).
Hoya said that its Brazilian subsidiary, which handles its local eyeglass lens business, has been growing steadily in real terms, outperforming competitors “by a wide margin,” but it is taking a writeoff on the goodwill because it is not optimistic about its future growth.
For the full financial year ended on March 31, the Hoya group has reported an 18 percent increase in the operating profit to ¥129.5 billion (€1.0bn-$1.2bn) on 12 percent higher overall revenues of ¥535.6 billion (€4.2bn-$4.9bn). Net earnings went up by 14 percent to ¥99.2 billion (€779.1m-$900.8m).
The Life Care division booked a stable operating margin of 18.0 percent for the past year on 12 percent higher sales of ¥352.9 billion (€2.8bn-$3.2bn). The division's operating margin improved sequentially in the course of the year, reaching the level of 19.7 percent in the final quarter.
In the current financial year, the further expected margin expansion in the Life Care division should lead the group to raise its overall profits more than sales, which will benefit from upside factors for intraocular lenses and endoscopes.