JAPAN: Daikin is predicting a 44% hit on its operating profit this year as a result of the coronavirus pandemic, with sales expected to drop 8.6% to JPY2,330bn (US$21.7bn).

Announcing the consolidated results for the fiscal year ended March 31, 2020, Daikin Industries president and CEO Masanori Togawa revealed that the company had sought JPY200bn of co-financing from Sumitomo Mitsui Banking Corporation.

Daikin expects a prolonged effect from the coronavirus. Its biggest air conditioning markets, Europe and Asia, are likely to be particularly affected. Lockdowns in many countries in Asia have means it will take some time for economic activity to return to normal. Factories in China are returning to pre-outbreak production levels, but its factories in India and Malaysia are not in full operation.

Despite the effects of COVID-19 on the fourth quarter figures, Daikin saw sales rise 2.8% to JPY2,550bn ($23.8bn) – its 10th consecutive year of sales increases. Operating profit dropped 3.9% to JPY265.5bn ($2.48).

Total sales in the air conditioning and refrigeration business increased 3.9% year on year to JPY2,309bn ($21.5bn).

Sales in Europe exceeded the previous year, residential ac sales benefitting from the effects of the hot summer. Sales were higher than in the previous fiscal year due to strong sales in northern Europe, particularly Belgium, the Netherlands, and Germany.

Both commercial ac sales and residential heat pump sales were also significantly higher than the previous year.

Sales in the chemicals segment totalled JPY179,883m ($1,678m), down 10.4% from the previous year.