MIRA
INFORM REPORT
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Report Date : |
29.03.2007 |
IDENTIFICATION
DETAILS
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Name : |
DAIKIN INDUSTRIES LTD |
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Registered Office : |
Umeda Center Bldg, 2-4-12 Nakazaki-Nishi Kitaku Osaka 530-8323 |
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Country : |
Japan |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
Feb 1934 |
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Legal Form : |
Limited Company (Kabushiki Kaisha) |
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Line of Business : |
Manufacturing of air conditioners |
RATING &
COMMENTS
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MIRA’s Rating : |
Ba |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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Maximum Credit Limit : |
Yen 20785.8 millions |
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Status : |
Good |
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Payment Behaviour : |
Usually correct |
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Litigation : |
Clear |
name
DAIKIN INDUSTRIES LTD
REGD NAME
Daikin Kogyo KK
MAIN OFFICE
Umeda Center Bldg, 2-4-12 Nakazaki-Nishi Kitaku Osaka 530-8323 JAPAN
Tel: 06-6373-4312
Fax: 06-6373-4330
E-Mail address: info@daikin.co.jp
ACTIVITIES
Mfg of air conditioners
BRANCHES
Tokyo (3), Suita
OVERSEAS
New York, Düsseldorf, Singapore, Beijing, Shanghai,
Guangzhou
(Affiliates): China (10), Europe (16), Asia/Oceania (11),
North & Latin America (9), other (2).
(Tot 48)
FACTORY(IES)
Sakai (2), Yodogawa, Shiga , Kashima
CHIEF EXEC
NORIYUKI INOUE, CH & CEO
YUKIYOSHI OKANO, PRES
Yen Amount: In
million Yen, unless otherwise stated
SUMMARY
FINANCES FAIR A/SALES Yen 792,857 M
PAYMENTS REGULAR CAPITAL Yen 28,023 M
TREND STEADY WORTH Yen 343,492 M
STARTED 1934 EMPLOYES 21,747
COMMENT
MFR SPECIALIZING IN AIR CONDITIONERS. FINANCIAL SITUATION CONSIDERED FAIR AND GOOD FOR ORDINARY
BUSINESS ENGAGEMENTS.
MAX CREDIT LIMIT: YEN 20,785.8 MILLION, 30 DAYS NORMAL TERMS.
Forecast
(or estimated) figures for 31/03/2007 fiscal term
HIGHLIGHTS
This is the largest mfr of commercial-use air
conditioners. Makes household-use air
conditioners, too. Pioneer of
application of CFC as refrigerant for freezers. Diversified into hydraulic equipment, fluorine resins/gas, and
shells/warheads for Defense Agency.
World’s top class in fluorine chemicals. Holds 17.1% of domestic share in home-use air conditioners, only shade behind Matsushita Electric Ind, whose
share is 17.3%. Active in overseas
operations accounting for about 50% of total sales.
(Recent
news release dated 19/01/2007):
Completion of acquisition for O.Y.L. Industries Berhad
(Headquarters in Kuala Lumpur, Malaysia) was effected as of January 18,
2007. The total purchase price for 100%
of OYL shares was approx Yen 243,800
million.
Our comments: OYL sales are approx Yen 170,000 million/annually. Synergy effects of the purchase are said to be Yen 10,000 million/annually after 3 years. The purchase will place the firm second globally in the air conditioning sector.
FINANCIAL INFORMATION
The sales volume for Mar/2006 fiscal term amounted to Yen
792,857 million, an 8.8% rise from Yen 728,880 million in the previous
term. Sales of air
conditioners/freezers grew in domestic market thanks to hot summer temperature,
and strong demand in overseas markets, particularly in Europe & China that
was sustained from the previous fiscal year.
Other factors contributing to the rise included in the Chemicals Div’s
sales, particularly sales of semiconductor-related products & automakers. By divisions, air conditioning was up 8.9%
to Yen 641,657 million; chemicals up 7.8% to Yen 107,411 million. The recurring profit was posted at Yen
68,682 million and the net profit at Yen 40,708 million, respectively, compared
with Yen 63,478 million recurring profit and Yen 38,747 million net profit,
respectively, a year ago. Wrote off Yen
1,952 million as extraordinary losses stemming from the withdrawal of
unprofitable operations.
For the current term ending Mar 2007 the recurring profit is
projected at Yen 76,000 million and the net profit at Yen 45,500 million, on a 22.3%
rise in turnover, to Yen 970,000 million.
Air conditioners will continue increasing, led by growing demand
particularly in China, other in Europe & USA. Continues expansion & production boost
at plants in Asia & Europe. Cost
reduction efforts will continue to cover higher material and labor costs. Cost cuts will further include review of
design process and increased overseas procurement.
(Fourth Quarter results ending Dec/2006): Sales 657,707 million
(up 16.2%), operating profit Yen 58,840 million (up 24.5%), recurring profit
Yen 59,475 million (up 23.5%), net profit Yen 32,698
million (up 15.5%). (% compared with the same period the previous year). Exports expanded, led by steady capital
investment and weaker Yen against foreign currencies. Particularly to France, Australia, China and Thailand. Fluorine resins were in increased demand in
China and those for domestic
semiconductor mfrs. Supply of
ammunitions/warheads to Self Defense Agencies centered in the 3rd
quarter period contributed.
The financial situation is considered FAIR and good for
ORDINARY business engagements. Max
credit limit is estimated at Yen 20,785.8 million, on 30 days normal terms.
REGISTRATION
Date Registered: Feb
1934
Legal Status: Limited
Company (Kabushiki Kaisha)
Authorized: 500
million shares
Issued: 263,813,973
shares
Sum: Yen
28,023 million
Major shareholders (%): Japan Trustee Services Bank T (18.6),
Master Trust Bank of Japan (6.8), Chase Manhattan Bank (London) (4.5), State
Street Bank of Trust (4.3), Northern Trust Co (3.3), Matsushita Electric Ind
(2.6), Bank of New York (2.6), Trust & Custody Services Bank (2.1), SMBC (1.8),
BBH Boston Custodian GMO (1.7); foreign owners (36.6).
No. of shareholders: 10,567
Listed on the S/Exchange (s) of: Tokyo, Osaka, Nagoya,
Sapporo, Fukuoka
Managements: Noriyuki Inoue, ch; Yukiyoshi Okano, pres;
Katsuhiko Takagi, v pres; Guntaro Kawamura, v pres; Hiroshi Tanaka, v pres;
Masanori Togawa, mgn dir; Shigeki Hagiwara, dir; Takeshi Ebisu, dir
Nothing detrimental is known as to the commercial morality
of executives.
Related companies
Daikin Europe, Daikin America, other (Tot 99 as of Mar/06).
OPERATION
Activities: Manufactures air conditioners & freezers (81%),
chemicals (13%), others (6%).
Overseas sales ratio 46.4%: Asia/Oceania (18.1%): Singapore,
China, Hong Kong, Taiwan, Korea, Indonesia, Philippines, Australia, India; Europe
(22.6%): UK, France, Italy, Germany, Spain, Belgium, Greece, Portugal; Americas
(4.6%): USA, Mexico, Argentina; Other regions (1.1%): Mid East, Africa.
(Handling
items by divisions):
Air Conditioning &
Refrigerator Div: Room air conditioners, room air cleaners, Commercial-use
air conditioners, commercial-use air cleaners, large-scale refrigerators,
marine-type container refrigeration units, container refrigeration, marine
vessel air conditioners & refrigerators, water chillers;
Oil Hydraulic Div:
oil hydraulic products for industrial machinery, oil hydraulic products for mobile
equipment, centralized lubrication units & systems;
Defense Systems Div:
ammunition, precision components for aircrafts, warheads for serial torpedoes;
home oxygen therapy equipment, veterinary equipment;
Chemical Div: fluoro
polymers, synthesized products, fluoro carbon gas, fluoro coatings, fluoro elastomers, high performance chemicals;
New
Operations Div: computer graphics systems.
Clients: [Wholesalers, government agencies] Daikin Kucho Tokyo (Kucho means Air Conditioners, Daikin Europe NV, Daikin Kucho Osaka, Sumitomo Corp, National Defense Agency, Daikin Kucho Tokai, Daikin America Inc, Daikin Kucho Kyushu, Itochu Non-ferrous Material, other.
No. of accounts: 2,000
Domestic areas of activities: Nationwide
Suppliers: [Mfrs, wholesalers] Matsushita Electric Ind, Sumikei
Corp, Daikin Facilities, Fuso Ind, Chofu Seisakusho, Daikin Electronic Parts
Inc, Arai Seisakusho, Shimohira Electric Ind, Ryusho Ind, other.
Payment record: Regular
Location: Business area in Osaka. Office premises at the caption address are owned and maintained
satisfactorily.
Bank References
SMBC (Osaka H/O)
Resona Bank (Osaka-Chuo)
Relations: Satisfactory
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FINANCES (Consolidated
in million yen) |
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Terms Ending: |
31/03/2006 |
31/03/2005 |
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INCOME STATEMENT |
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Annual Sales |
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792,857 |
728,880 |
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Cost of Sales |
522,385 |
472,221 |
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GROSS PROFIT |
270,471 |
256,658 |
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Selling & Adm Costs |
203,394 |
195,761 |
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OPERATING PROFIT |
67,077 |
60,896 |
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Non-Operating P/L |
1,605 |
2,582 |
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RECURRING PROFIT |
68,682 |
63,478 |
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NET PROFIT |
40,708 |
38,747 |
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BALANCE SHEET |
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Cash |
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55,461 |
41,842 |
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Receivables |
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147,679 |
136,292 |
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Inventory |
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140,242 |
141,893 |
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Securities, Marketable |
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14,003 |
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Other Current Assets |
47,588 |
33,552 |
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TOTAL CURRENT ASSETS |
390,970 |
367,582 |
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Property & Equipment |
196,485 |
170,209 |
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Intangibles |
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13,632 |
13,477 |
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Investments, Other Fixed Assets |
118,295 |
66,605 |
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TOTAL ASSETS |
719,382 |
617,873 |
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Payables |
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84,252 |
78,065 |
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Short-Term Bank Loans |
53,044 |
57,643 |
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Other Current Liabs |
147,157 |
132,459 |
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TOTAL CURRENT LIABS |
284,453 |
268,167 |
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Debentures |
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20,000 |
20,000 |
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Long-Term Bank Loans |
36,030 |
36,960 |
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Reserve for Retirement Allw |
5,072 |
4,553 |
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Other Debts |
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19,096 |
5,438 |
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TOTAL LIABILITIES |
364,651 |
335,118 |
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MINORITY INTERESTS |
11,238 |
8,633 |
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Common
stock |
28,023 |
28,023 |
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Additional
paid-in capital |
25,968 |
25,971 |
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Retained
earnings |
250,247 |
215,681 |
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Evaluation
p/l on investments/securities |
33,053 |
12,294 |
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Others |
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7,751 |
(6,501) |
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Treasury
stock, at cost |
(1,550) |
(1,347) |
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TOTAL S/HOLDERS` EQUITY |
343,492 |
274,121 |
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TOTAL EQUITIES |
719,382 |
617,873 |
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CONSOLIDATED CASH FLOWS |
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Terms ending: |
31/03/2006 |
31/03/2005 |
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Cash
Flows from Operating Activities |
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63,511 |
43,970 |
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Cash
Flows from Investment Activities |
-63,420 |
-42,091 |
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Cash
Flows from Financing Activities |
-4,283 |
3,534 |
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Cash,
Bank Deposits at the Term End |
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54,177 |
55,385 |
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ANALYTICAL RATIOS Terms
ending: |
31/03/2006 |
31/03/2005 |
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Net
Worth (S/Holders' Equity) |
343,492 |
274,121 |
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Current
Ratio (%) |
137.45 |
137.07 |
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Net
Worth Ratio (%) |
47.75 |
44.37 |
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Recurring
Profit Ratio (%) |
8.66 |
8.71 |
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Net
Profit Ratio (%) |
5.13 |
5.32 |
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Return
On Equity (%) |
11.85 |
14.13 |
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RATING
EXPLANATIONS
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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>86 |
Aaa |
Possesses an extremely sound financial base with the strongest
capability for timely payment of interest and principal sums |
Unlimited |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
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41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
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26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
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11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
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<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
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NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
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This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)