The downturn in Europe and Japan has forced air conditioning giant Daikin to accept net profits will drop by two thirds this financial year.
The company has radically revised its profits forecast after air conditioning sales in Europe and Australia were hit particularly hard in the third quarter - although sales in China and America have been holding up.
A report on its results for the third quarter – September to December – showed air conditioning sales down to 242.2 billion Yen (£1.8bill) compared to 258.8bill Yen (£1.95bill) in the same period of 2007. Operating profits for air conditioning more than halved from 23.2bill Yen (£174 mill) in the previous year to 9.6bill Yen (£72.6 mill).
Daikin has now cut its previous full year overall net profit forecast by 38 billion Yen to 25 billion Yen (£188mill) compared to the previous financial year’s profits of 75.2 billion Yen (£565mill).
To protect profits the company is looking for “further expansion of favourable fields, regions and products such as heating systems in Europe”
It is also reducing and postponing investment in facilities while also clamping down on fixed costs and its supply chain.