Hitachi Cable News vol.374
73rd annual business report
From April 1, 2009 to March 31, 2010

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Message from the President

During the consolidated fiscal year under review (fiscal 2010; the year ended March 31, 2010), the world economy was supported by economic stimulus measures being implemented by individual nations, and due in large part to economic growth in emerging countries, remained on the road to recovery. Although the recovery in internal demand was weak, Japan’s domestic economy also continued to rebound thanks to an improvement in economic conditions overseas and the impact of various measures aimed at boosting the economy.

The Hitachi Cable Group recorded fiscal-year net sales of 372,450 million yen, an operating loss of 6,381 million yen, an ordinary loss of 4,939 million yen, and a net loss of 9,110 million yen. During the previous fiscal year (fiscal 2009), the Group’s business performance suffered a marked deterioration due to the impact of the global financial crisis that began in the autumn of 2008 and the sharp economic downturn that followed. To address this situation, we made an all-out effort to cut costs, particularly fixed costs, and took measures to improve the structure of our business, especially with regard to operations targeting the semiconductor and automotive markets, which have been suffering a decline in profitability. As a result, in the fiscal year under review we succeeded in narrowing our operating and ordinary losses by the large margins of 8.4 billion yen and 15.0 billion yen, respectively, compared with the previous fiscal year. Moreover, we received shareholder approval to award an end-of-year dividend of 2.5 yen per share, the same amount as the interim dividend paid out at the mid-point of the fiscal year under review.²

At the same time, the Group formulated a new medium-term management plan, Plan “BRIDGE,”³ to cover the fiscal years 2011 through 2013. The fundamental policy under this plan is to “restore the Group’s status as a highly profitable enterprise and reshape it into a truly global entity.” In line with this basic strategy, we will be focusing on profit margins and fundamentally strengthening our operations in foreign countries, which are expected to see strong economic growth in the future, such that once implementation of the plan is complete we will have transformed the Group into a collection of highly profitable businesses based primarily on materials, parts, and devices relating to the field of infrastructure.

On a different note, in May 2010 Japan Fair Trade Commission announced the imposition of surcharges on a number of manufacturers of fiber-optic cables. Although Hitachi Cable was not among the group penalized, we will be bolstering compliance, improving education for executives and employees, and working to prevent recurrences of wrongdoings and to restore trust.

I therefore hope that the Hitachi Cable Group can continue to count on the support of all our shareholders.

June 2010

1 Fiscal 2010: April 1, 2009 to March 31, 2010

2 For a total annual dividend of 5 yen per share

3 For details of our new medium-term management plan, Plan “BRIDGE,” please refer to the Feature article: New medium-term management plan: Plan “BRIDGE”

President and Chief Executive Officer,
Imai Mitsuo