NOK downgrades forecasts on changed automotive, industrial trends

Tokyo – NOK Corp. has revised down its consolidated financial forecasts for the first six months and full-year of its current fiscal year (FY2023), the Tokyo-based group has announced.

The downgrade, from previous guidance on 10 May, was linked to “recent changes in business environment" as well as first quarter results* for its fiscal year to 31 March.

For the first-half, NOK is sticking with the view that automotive production is "steadily recovering" due to an easing of supply-shortages around semiconductors and other components.

However, sales growth for automotive applications has been weaker than the forecast issued in May, said a 2 Aug update from the Japanese group.

Meanwhile, sealing product sales for automotive and general industrial machinery applications “in the Chinese and ASEAN market are anticipated to be lower than our expectation.”

And, in its electronic products business, NOK said that “although we expected demand recovery in hard disk drives, sales in the area were below our anticipation.”

Overall, so, NOK now expects first half sales to be 3.6% lower than previously forecast – Yen341,000 million (€2,145 million) compared to Yen353,800 million before.

At Yen2,400 million, operating income – from 1 April to 30 Sept – is meanwhile anticipated to come in 52.9% below NOK's May forecast, due principally to lower sales.

For the full-year, NOK expects net sales of Yen748,000million, 1.7% lower than previously forecast and operating earnings of Yen26,200 million, 10.3% below its May guidance.

For the group's last fiscal year (FY2022), NOK posted net sales of Yen709,956 million and operating income of Yen15,378 million.

With around 38,000 employees, NOK, manufactures sealing products, industrial mechanical parts, hydraulic equipment, nuclear power equipment, synthetic chemical products, and electronics parts, among other products.

*For the first three months of its current consolidated fiscal year, NOK reported net sales of Yen163,957 million, up 1.8% year-on-year, and an operating loss of Yen1,226 million, compared to an operating loss of Yen1,394 million yen in the same period a year before.