Nikon Net Income May Triple to 50 Bln Yen in 3 Years

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Nikon Net Income May Triple to 50 Bln Yen in 3 Years (Update1)

March 30 (Bloomberg) -- Nikon Corp., the world's fifth- biggest digital camera seller, expects net income to almost triple in the next three years, boosted by digital single-lens reflex cameras and chip-making equipment.

Profit will rise to 50 billion yen ($425 million) in the year ending March 2009, President Michio Kariya said in an interview after the announcement of the company's mid-term plan. That compares with the expected 18 billion yen for fiscal year 2005.

Sales probably will rise 27 percent to 900 billion yen in the three-year period, the Tokyo-based company said in a statement. Operating profit, or sales minus the cost of goods sold and administrative expenses, is forecast to climb 70 percent to 90 billion yen from an expected 53 billion yen this fiscal year.

Nikon, which gets half of its sales from the camera unit, is raising shipments of more profitable single-lens reflex models to make up for price declines in the $13 billion market for compact digital cameras. Nikon is also attracting orders for its higher- margin steppers, machines that print circuitry on to silicon wafers, on rising demand for chips and large liquid-crystal displays.

``We want to create a company that can maintain growth even amid severe market fluctuations,'' Kariya said. ``We want to become a 1 trillion yen company as soon as possible.''

Reduce Debt

The company also aims to reduce debt and bring down its debt-equity ratio to below 30 percent, from the current 85 percent.

For further growth, Kariya said he will consider possible mergers and acquisitions in fields where the company is lacking the technology. He did not provide details.

Shares of Nikon, which announced the forecasts after markets closed, fell 1.2 percent to 2,030 yen as of the 3 p.m. close on the Tokyo Stock Exchange.

Nikon, competes with Canon Inc. in digital SLR market, said it aims to gain 40 percent share in digital SLR, compared to about 35 percent now. The company expects the digital SLR market to jump more than 60 percent to 6.5 million units by March 2009.

Shipments of Nikon's digital SLR cameras will probably double to 2.7 million units in the year ending March 2009, from 1.4 million expected this year. Total shipments of digital cameras are projected to rise to 10.7 million units from 8.4 million.

Capital Spending

Sales at the camera unit will rise 20 percent to 480 billion yen in the year ending March 2009, Nikon said. Operating profit will gain a third to 44 billion yen.

Nikon expects to raise capital spending 20 percent to 100 billion yen over the next three years to develop products and expand facilities. The company will increase research and development costs 60 percent to 165 billion yen in the period.

The company also plans to enter new industries, including glass materials and other optical components, Kariya said.

Nikon, the world's second-largest maker of steppers, which print circuitry on to silicon wafers, expects to ship 165 chip steppers and 65 of the machines used to make liquid-crystal displays by March 2009.

The stepper division's sales will gain a third to 310 billion yen. Operating profit of the unit will double to 38 billion yen.

Nikon grabbed share in chip steppers from rivals ASML Holding NV, the market leader, and Canon. Nikon said last month it raised its share to 36 percent, without providing comparative figures. ASML has 33.6 percent and Canon 30.4 percent.

The company said expects its most advanced types of steppers used for chips, also known as ArFs, to make up a bigger proportion of total shipments.

``We're going to prioritize profit,'' Kariya said. ``We don't want to get pulled into fierce price competition.''

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