SCRUTINY: Officials inspect the burnt auxiliary power unit battery, removed  from an All Nippon Airways Boeing 787 Dreamliner aircraft that made an  emergency landing last month in Takamatsu. Picture: REUTERS
SCRUTINY: Officials inspect the burnt auxiliary power unit battery, removed from an All Nippon Airways Boeing 787 Dreamliner aircraft that made an emergency landing last month in Takamatsu. Picture: REUTERS

GS YUASA, the company whose products are the focus of US and Japanese investigations into what caused battery problems on Boeing’s 787 Dreamliner, said on Tuesday it did not expect the issue to hurt either its earnings or its reputation.

Kyoto-based GS Yuasa, valued at about $1.5bn, said it did not expect the aircraft battery problems to affect orders from vehicle makers for its lithium-ion batteries, and it kept its forecast for full-year operating profit of ¥10bn ($108m) — which would be more than a third below last year.

At a news conference, GS Yuasa director Toshiyuki Nakagawa skirted around questions on the status of the company’s supplies to Boeing — a business that accounts for less than 1% of its revenue.

"We cannot comment on the details of the investigation, but we have confidence in the quality of our manufacturing," he said. "As any manufacturer, we would never supply anything that is dangerous," he said in response to a question on the potential danger of lithium-ion battery technology. "But these incidents have occurred, and we must properly find the cause."

The company, which has said it sees lithium-ion batteries as a central part of its business and a future profit driver, said it did not plan to list possible damages claims as a potential risk in its quarterly filings.

All Boeing 787s have been grounded since January 17 as investigators probe the cause of two incidents with the plane’s lithium-ion batteries — a battery fire on a Japan Airlines 787 at a US airport and the emergency landing of a domestic All Nippon Airways flight after battery problems triggered a smoke alarm.

Japan’s transport safety agency said it was still unclear whether battery chemistry or an electrical fault caused the main battery on the All Nippon flight to overheat, forcing it to make the emergency landing.

Boeing has not changed its production plans for the lightweight, carbon-composite Dreamliner, but it has stopped delivering new planes while the investigations continue.

GS Yuasa said operating profit in the April-December period — before the recent 787 problems — dropped 28% to ¥6.46bn ($69.7m) on revenue that fell 4.6% to ¥196bn, as vehicle makers placed fewer orders for lithium-ion batteries and sales were sluggish in Southeast Asia and Europe.

The company, created in 2004 from the merger of Japan Storage Battery and Yuasa, employs about 12,400 people making batteries for cars, motorcycles — with 27% market share, it is a global leader — and a range of industrial customers. In November, the company won an order to supply lithium-ion batteries for the International Space Station.

Ahead of the results, GS Yuasa shares ended 0.3% higher, but are still down more than 5% since the Boston fire on January 7.

In a sign that the probe may be getting more complex, Japan Transport Safety Board chairman Norihiro Goto told a news conference investigators may widen their probe to other equipment on the Dreamliner. The board said it would send its investigators to Thales, the French company that makes control systems for the 787 battery, if needed.

CT scans showed six of the main battery’s eight cells on the All Nippon Dreamliner were charred and badly damaged, Mr Goto said.

On Monday, Boeing asked the US Federal Aviation Administration for permission to conduct Dreamliner test flights, suggesting it is making progress in finding a solution to the battery problems.

Reuters