Japan's Nintendo Co. says its group net profit for the fiscal year ended March 31 dropped sharply due to hefty foreign exchange-related losses caused by the yen's rise against the U.S. dollar.

Japan's Nintendo Co. says its group net profit for the fiscal year ended March 31 dropped sharply due to hefty foreign exchange-related losses caused by the yen's rise against the U.S. dollar.

The Kyoto-based video-game machine and software maker posted a group net profit of ¥33.19 billion ($299 million), down 51% from ¥67.27 billion ($607 million) a year ago.

The decline in the company's bottom-line profit came despite solid mainline operations for the maker of home-use GameCube video game consoles and Game Boy portable game players.
Nintendo said its group revenue rose 2.1% to ¥514.81 billion from ¥504.14 billion a year earlier, while operating profit rose 7.6% to ¥107.68 billion.

Nintendo suffered a total of ¥67.88 billion in foreign exchange-related valuation losses, as the dollar fell sharply to ¥105.69 as of the March 31 end of the latest fiscal year from ¥120.20 billion a year before.

"They were only paper losses. Without them, the earnings results were solid," said Yasuhiro Minagawa, a company spokesman.

Nintendo keeps a lot of its foreign earnings in foreign markets where it can generate larger interest revenue than in Japan, where interest rates remain relatively low. It holds about $5.4 billion in dollar-denominated assets, about $5.2 billion of which is managed in term deposits and cash.

The company maintained its annual dividend at ¥140.

For this fiscal year through March 2005, Nintendo expects its group net profit to rebound to ¥70 billion on a likely 3% rise in revenue to ¥530 billion.

While the company expects to see higher sales of its traditional products, it is also planning to launch a new portable video-game player, tentatively named Nintendo DS, later this year.


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