The leading manufacturer of integrated circuit ceramic packages said its group pretax profit dropped 25.2 percent to 25.13 billion yen. Sales inched up 0.3 percent to 518.4 billion yen.

The profit declines were mainly due to an appraisal loss of some 88 million dollars related to the value of stockpiles of production materials at Kyocera's US condenser subsidiary AVX Corp.

The appraisal loss at the US unit had been initially planned to be booked in the second half, Kyocera said.

The company pointed to a slump in its communications businesses as another reason for the profit decline.

"We suffered stagnant sales in cellular phones and needed to report development costs of new mobile phones to be launched in the latter half," a Kyocera spokesman said.

Kyocera's profit from sales of equipment devices, led by information and telecommunications equipment as well as precision instruments, plunged 39.7 percent to 10.3 billion yen for the first half.

Among other elements behind the overall profit decline was the delayed launch of new copier machines, the spokesman said.

For the year to March 2004, Kyocera forecast a net profit of 50 billion yen and pretax profit of 79 billion on revenue of 1.14 trillion yen.

Kyocera announced its results after the close of trading. The company's shares closed up 5.25 percent or 330 yen at 6,610 yen on the Tokyo Stock Exchange, while the benchmark Nikkei 225 index rose 1.02 percent.

SPACE.WIRE