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I would like to express my sincere appreciation for your continuous support to the NEC Group.
The growth rate of world economy for the six months ended September 30, 2011 was slowed down due to deteriorating consumer and investor sentiment in developed countries. This was mainly caused by the financial crisis in Europe and decelerating exports to developed countries, and the rising interest rates in order to control inflation in emerging countries.
The Japanese economy continued to recover from the impact caused by the Great East Japan Earthquake of March 2011. In terms of our market environment, the IT investment in Japan did not achieve full-scale recovery, although Network-related demand backed by rapid growth of smartphones remained strong.
In the first half of the fiscal 2012, although consolidated net sales dropped 1.8% year on year to 1,443.2 billion yen, consolidated operating income improved 5.7 billion yen year on year to 6.8 billion yen. However, NEC posted a consolidated net loss of 11.0 billion yen, 16.1 billion yen better than the previous fiscal year.
In light of these circumstances, NEC regrettably has decided not to pay an interim dividend for fiscal 2012. Though an annual dividend is not determined yet at this time since outlook for the market circumstances for second half is unclear, NEC Group is striving to implement management with speed in order to achieve full year forecasts and regain the trust of capital markets.
Through contribution to early recovery from the earthquake disaster, resolution of the energy and food problem worldwide and participation in smart-city projects as advanced social infrastructure, NEC is moving forward with a strong will to increase profitability and create "an information society friendly to humans and the earth," as articulated in the NEC Group Vision 2017.
We look forward to your continued support and understanding as we work to reach our goals.
November 2011
Nobuhiro Endo
President, NEC Corporation
