Canon says high yen caused 61% profits fall

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TOKYO (Reuter) - Canon, the cameras, photocopiers and office equipment manufacturer, blamed the surging yen for its lower profits in the first half of 1993 but said it hoped the dollar would recover later this year.

Canon announced parent current profit (pre-tax profit including gains and losses made through non-operating activities) of Y15.54bn ( pounds 104.4m) in the six months to June. That represented a drop of 61 per cent from the same period last year.

The group posted half-year sales of Y493.91bn, 2.6 per cent down from the previous year.

The yen has risen about 20 per cent against the dollar since January. Yesterday it edged down to Y101.45 to the dollar from a high of Y100.25 and half a yen weaker than yesterday's close. The break in the yen's long rally was prompted by the government's threat of emergency measures to halt the currency's advance.

A Canon official said sluggish demand in Japan and Europe was another reason for the drop. Demand in the US was slowly picking up in the first half of 1993, he said.

Of Canon's sales in the first half of 1993, 79 per cent came from overseas markets and 21 per cent from the domestic market, he said. Almost all exports were denominated in dollars, marks and other foreign currencies.

Despite the yen's continuing rise, Canon is maintaining the parent earnings forecast it announced in May, when it said 1993 parent current profit would be Y38bn on expected parent sales of Y1,060bn. The company sees the average exchange rate in the period between May and December at 110 yen to the dollar.