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Home > News Room > NEC Announces Nonpayment of Interim Dividend and Revision of Annual Dividend Forecasts for the Fiscal Year Ending March 31, 2009

NEC Announces Nonpayment of Interim Dividend and Revision of Annual Dividend Forecasts for the Fiscal Year Ending March 31, 2009

 

***For immediate use October 30, 2008


Tokyo, October 30, 2008 - NEC Corporation announced that it decided at a meeting of its Board of Directors today to pay no interim dividend for the fiscal year ending March 31, 2009 and also to revise its annual dividend forecasts for the fiscal year ending March 31, 2009 to undetermined.

As previously announced in its revision of financial results forecasts on October 22, 2008, NEC expected to pay an interim dividend of 4 yen per share of common stock for the fiscal year ending March 31, 2009 (which would result in an annual dividend of 8 yen per share, including the interim dividend).

At the time of the previous announcement, NEC estimated on a non-consolidated basis that the retained earnings would exceed over 110 billion yen as of the end of September, 2008, and the expected annual net income in the fiscal year ending March 31, 2009 (taking into account the business results for the six months ended September 30, 2008) would reach 12 billion yen. As a result, NEC assessed that it would retain sufficient surplus to pay the dividend for both interim and year-end periods.

However, after the announcement, stock prices declined sharply and the Nikkei stock average plunged seriously. Simultaneously, the stock prices of NEC listed subsidiaries and affiliates declined significantly and certain companies are currently still well below book-value per share. Anticipating that those stock prices will remain low due to uncertainty in the stock market, NEC now highly expects the possibility of recording a loss from the devaluation of its stock in subsidiaries and affiliates in the fiscal year ending March 31, 2009. NEC evaluates that if losses due to the above devaluation are incurred during the fiscal year ending March 31, 2009, it is likely to cause negative retained earnings at the end of the fiscal year.

As a result, NEC has reluctantly decided to pay no interim dividend for the fiscal year ending March 31, 2009.

Due to uncertainty in the stock market, NEC also decided the amounts of year-end dividend and annual dividend to be undetermined at this time. NEC is currently evaluating the outlook for future dividend and will announce updated information in the near future.

NEC sincerely appreciates your understanding in this matter.

Dividend per share
  Interim Dividend Year-end Dividend Annual Dividend
Forecast as of October 22, 2008 4 yen 4 yen 8 yen
Revised forecast for FY ending March 31, 2009 0 yen Undetermined Undetermined
(Reference) FY ended March 31, 2008 4 yen 4 yen 8 yen



 
CAUTIONARY STATEMENTS:
This material contains forward-looking statements pertaining to strategies, financial targets, technology, products and services, and business performance of NEC Corporation and its consolidated subsidiaries (collectively "NEC"). Written forward-looking statements may appear in other documents that NEC files with stock exchanges or regulatory authorities, such as the Director of the Kanto Finance Bureau, and in reports to shareholders and other communications. NEC is relying on certain safe-harbors for forward-looking statements in making these disclosures. Some of the forward-looking statements can be identified by the use of forward-looking words such as "believes," "expects," "may," "will," "should," "seeks," "intends," "plans," "estimates," "targets," "aims," or "anticipates," or the negative of those words, or other comparable words or phrases. You can also identify forward-looking statements by discussions of strategy, beliefs, plans, targets, or intentions. Forward-looking statements necessarily depend on currently available assumptions, data, or methods that may be incorrect or imprecise and NEC may not be able to realize the results expected by them. You should not place undue reliance on forward-looking statements, which reflect NEC's analysis and expectations only. Forward-looking statements are not guarantees of future performance and involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those in the forward-looking statements. Among the factors that could cause actual results to differ materially from such statements include (i) global economic conditions and general economic conditions in NEC's markets, (ii) fluctuating demand for, and competitive pricing pressure on, NEC's products and services, (iii) NEC's ability to continue to win acceptance of NEC's products and services in highly competitive markets, (iv) NEC's ability to expand into foreign markets, such as China, (v) regulatory change and uncertainty and potential legal liability relating to NEC's business and operations, (vi) NEC's ability to restructure, or otherwise adjust, its operations to reflect changing market conditions, (vii) movement of currency exchange rates, particularly the rate between the yen and the U.S. dollar, (viii) the impact of unfavorable conditions or developments, including share price declines, in the equity markets which may result in losses from devaluation of listed securities held by NEC, and (iv) impact of any regulatory action or legal proceeding against NEC. Any forward-looking statements speak only as of the date on which they are made. New risks and uncertainties come up from time to time, and it is impossible for NEC to predict these events or how they may affect NEC. NEC does not undertake any obligation to update or revise any of the forward-looking statements, whether as a result of new information, future events, or otherwise.
The management targets included in this material are not projections, and do not represent management's current estimates of future performance. Rather, they represent targets that management will strive to achieve through the successful implementation of NEC's business strategies.
Finally, NEC cautions you that the statements made in this material are not an offer of securities for sale. Securities may not be offered or sold in any jurisdiction in which required registration is absent or an exemption from registration under the applicable securities laws is not granted.

***

NEC Press Contacts (Japan):

Joseph Jasper
NEC Corporation
+81-3-3798-6511
E-Mail:j-jasper@ax.jp.nec.com

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