Now it is on time, I would like to start the performance briefing, the first half of FY March 2019 for the TDK Corporation. Let me introduce the attendance today. President and CEO, Mr. Shigenao Ishiguro. Senior Vice President, Mr. Hiroyuki Uemura. Managing Director, Mr. Noboru Saito. Managing Director, Mr. Tetsuji Yamanishi. Energy Solutions Business Company CEO, Mr. Fumio Sashida. These five are the attendees today from TDK. Thank you very much. First of all, the consolidated results for first half of fiscal year March 2019 is presented by Mr. Yamanishi. Hello, everyone. I am Yamanishi. Thank you very much for joining us for our performance briefing first half of FY March 2019. I thank you very much. I am going to first talk about the consolidated performance briefing.
The highlights of this business performance, the net sales was a 15.8% growth year-on-year, operating income's grown by 40.7%, is a substantial growth year-on-year in both the net sales as well as operating income. Now we could recognize that record high in both the semi-annual and quarterly basis. For the passive components business in the very favorable automotive business, ceramic capacitor and inductive devices, particularly for MLCC, have been growing its sales for MLCC for the automotive application with high reliability and redundancy, have been very good for the catching up with the increasing demand. We could continuously command that both net sales and profits, could make big contributions to, also the high profitability of the passive components business.
For the secondary battery, for the Energy Application Products, we could expand the business and sales to our major customer in China, tablet, notebook, PC, the gaming consoles, just like all these non-smartphone business sales have still continued to be very favorable. On the top of that, we have very good the higher utilization in facilities the continuous cost reduction efforts, all that contributes to the substantial increase into the sales and profits. For the Magnetic Application Products for HDD head, for the volume of sales have declined by 6% year-on-year. Still, we have a very good tailwind for the demand for the data centers for an increase of the nearline HDD heads have increased the profitability.
Also, structures are manufacturing the facilities, also we have a very substantial growth in both net sales and profits. In the magnetic business, this is part of the Magnetic Application Products, we try to catch up with the increasing demands in automotive industries, those are ferrite magnets and metallic magnets. For all these areas, we are going through that, we try to enhance the process improvements and product development still. When it comes to that ferrite magnets business, it turned out to be very difficult to make a recovery for the short period of time. In this Q2, we recognize that impairment loss for the long-term manufacturing and production. Next, let me talk about the business performance overview of one in first half. Net sales was JPY 721.9 billion. It was up by JPY 98.3 billion, 15.8% year-on-year.
Operating income was at JPY 62.2 billion, including the JPY 4.7 billion of impaired loss. It was increased by JPY 18 billion, 40.7% year-on-year. Income before income tax was JPY 57.8 billion. Net income was JPY 41.1 billion. Earnings per share was JPY 325.30. Now, the part of the change of the US GAAP requirements and the pension benefit obligations, and the part of the cost of this, the retirement allowance, JPY 1.9 billion in the first half, was now recombined into that non-operating income and non-operating expenses. From Q1, that will be recognized as part of non-operating expenses. The average rates for that JPY 110.30 to the dollar, 0.7% of yen depreciations. For the euro, JPY 129.90, that's 3.0% of the yen depreciations.
Due to this impact of this, JPY 2.1 billion for the impact on the sales and JPY 1.5 billion of impacts to that operating income. When it comes to sensitivity of the currency on the operating income basis, one yen change went to JPY 1.2 billion when it comes to dollar and when it comes to euro, JPY 200 million is the impact for the one yen change. Next, let me talk about the segment-wise performance. From this fiscal year, we combined that sum in common module and trade and other products. That's why for the passive components, we revised that the last year's sales by JPY 12.4 billion less and operating income JPY 800 million less. The sales of the passive components was JPY 224.8 billion, 11.0% year-on-year growth, operating income was 30.4% and 31.6% growth year-on-year. Operating income margin was 13.5%.
It has been a very steady business and recovering. For the ceramic capacitor business, due to the products with high reliability and redundancy, we could steadily catch up with that expanded demands on automobiles, and we have that as increased sales. We also afforded to do to that improvements in productivity and product mix. We could successfully have the substantial increase of both profit and sales. Aluminum and film capacitor is also steady in the automotive markets, also we can have the good business also in industrial equipments. Inductive devices is still doing very good in the automotive market and steadily starting from this Q4. Now we have increased the sales also for that business for the smartphone, and we have a very good steady growth in business.
For the high-frequency component business, ceramic capacitor is favorable in the business in China for the smartphones, and we have incremental revenues. The piezoelectric components and the circuit protection business have also good and going well for the automotives and industrial equipments, and we have both incremental revenue and profit. Next, Sensor Application Products. Also, on the part of the recombination of the products, we revised the last year's sales by JPY 100 million less, and JPY 100 million up operating income. The sales of this Sensor Application Product is JPY 39.5 billion, 8.2% up year-on-year operating incomes, including that M&A cost, JPY 2.8 billion and now it's JPY 9.5 billion operating loss. The sales for the automotive markets have been very steady, and the temperature and pressure sensor, as well as magnetic sensor, have increasing in sales by 16%, including Europe, Japan market, Japanese market.
When it comes Magnetic sensors now and the sales for ICT market for the Magnetic sensor have substantially and greatly increased now. It might contribute to that profitability of the Magnetic sensors. When it comes Motion sensors, now there's game console business have been under the pressure of that declining demand, but still. And then also we have the declining ICT markets, and we need to pay for that, for the expenses, for the expansion of the customer base, and we also accelerate the development of new models. There's all that, and including development resource and cost. We have expanded loss in this area. Next, Magnetic Application Products. Also again, due to the recombination of the segments now, and we revised that in the last year's sales by JPY 24.5 billion and operating income, JPY 2.4 billion less in the last years.
When it comes to current business performance, sales was JPY 145.9 billion at 5.6% increase year-on-year, and operating income was JPY 4.4 billion and 49.4% of up year-on-year. Operating income margin was 3.0%. As also explained earlier, in this Q2, and we recognize that the impaired loss of ferrite magnet business by JPY 4.7 billion. This is the major reason of that declined profits. Excluding this one-time loss and on an actual basis, now we could secure the JPY 400 million of operating income, and that is 4.6% growth year-on-year. When it comes to HDD head, hard disk drive head, now the sales volumes declined by 6% year-on-year from the earlier, but on the other hand, we have the incremental decreased demand of data center HDD, and we have more sales on nearline head, and also with the improvement of the product mix.
We can have that, an increase of the average unit and the selling price show that we have the 6% growth in the revenues and the sales and also we have improvements of stability. When it comes to the HDD suspensions, and due to that incremental sales volumes, but also on the small size and highly added value products increased, so that we have the good improvements of the product mix, and we have the rising average unit cost. Also we have a very good expansion of the business of Suspension application product, ICT products, and now the profitability is turns to be better. For the magnets. For that, the industrial equipment for wind power generation magnets have declined in sales. This is due to the deterioration of the product mix, and we have declined both the sales and profits.
Also, as I explained earlier, in a ferrite magnet business, and it will be quite difficult for us to make a recovery. With the business for short-term business, we needed to recognize that impaired loss. Next, the Energy Application Products. So the traditional secondary battery, and on top of that, the industrial power supply and also the power supply business for the automotive markets now get all integrated energies. Again, in the industry combination, we pushed up last year's business segment to JPY 34.2 billion and also pushed up the operating income by JPY 1.1 billion. The sales of this first half was JPY 280.3 billion. Operating income was JPY 54.3 billion. That is 28.9% up and 54.7% of the sales and operating income margin was 19.4%. We now have a very substantial growth in sales as well as profitability.
When it comes to secondary batteries, on top of that, a substantial business growth in the smartphone market in China. We also have tablet, notebook, and the game console. That kind of non-smartphone market business has been steadily increasing and also on top. Together with that, the improvements in efficiency of the manufacturing side have been more efficient. Now, we also have the incremental sales and profits for the industrial equipment power supply. Next, let me talk about the breakdown of the operating income changes. In total, it has grown by JPY 18 billion in operating income. First of all, capacitor and HDD head and the secondary battery, they all contribute to that increase in sales and have a positive JPY 27.7 billion.
By the selling price decline and have a negative impact of JPY 9.9 billion, that can be more than offset by that JPY 16.3 billion of the rationalization and cost reductions and also for the effects of the restructuring and the JPY 400 million. When it comes to the expansion of business of secondary business and also developments and the other sensor business developments pushed up the SG&A by JPY 17.7 billion. There was a negative impact on the other hand, but including all the other factors, like for example, the Forex fluctuations or a JPY 16.8 billion of an actual positive impact of excluding the one-time expenses and also JPY 4.4 billion was declined for that, and M&A-related cost and the JPY 4.7 billion in impairment loss, and also including JPY 1.5 billion of foreign exchange positive impacts. In total, JPY 18 billion is the positive impacts.
Next, I'd like to explain about the consolidated results for the second quarter. Net sales, JPY 378.9 billion, increase of 13.4%. Operating income was 36.8%, improvement of 33.3%. Therefore, on the quarterly basis, including net sales and operating income, we were able to achieve the record high. For the second quarter, we have included the impairment loss of JPY 4.7 billion. However, the actual results for the operating income was JPY 41.5 billion, therefore net sales improvement in JPY 24.9 billion, and therefore improvement of 26.4%. Next, I'd like to explain the quarterly results by segment. Quarterly results by. For the ceramic capacitor, there have been improvements. For the temperature and pressure sensors, because of the implementation of the emission testing, it's going sideways. However, for the magnetic sensors, it had improved the sales to the ICT market.
For the MEMS sensors, there have been a decline of sales to the ICT. However, there have been improvement of the sales to drones and also the TV game consoles. For the operating income, we are able to achieve the improvement due to the increase of sales of the magnetic sensors. However, for the MEMS sensors, we have included the M&A cost of InvenSense of JPY 1.4 billion. Also, we have provided and increased the development resource for the new product. Therefore, there have been increase of R&D. However, in total, for the Sensor Application Products, we are able to reduce the R&D by JPY 300 million. For the magnetic segments, the sales had improved by 7%, increase of JPY 4.9 billion. HDD head sales, the shipment index had improved from 93-97 in the first quarter to the second quarter, increase of 4%, and the sales had increased by 5%.
For the HDD suspension, the volume had declined. However, the magnetic sales for the automobile industry had improved. Therefore, we had achieved a slight increase. For the Magnetic Application Products, operating income had been negative by JPY 2.6 billion. In the second quarter, we had included the impairment loss of JPY 4.7 billion. However, excluding that, we are able to achieve the actual increase of JPY 2.1 billion. For the HDD head, there have been improvement for the suspension as well. However, because of the magnets, we aren't able to have the improvement. For the Energy Application segments, the sales had improved by JPY 29.2 billion, improvement of 23.2%. For the rechargeable batteries, the sales to the Chinese smartphone market is favorably, and also there have been an increase of sales to North America, as well as increase of sales of tablets and PCs. For the industrial batteries, it's going fairly well.
For the operating income from the first quarter, JPY 21 billion, an increase of JPY 12.3 billion to JPY 33.3 billion. Because of the increase of the volume for the rechargeable batteries, improvement of marginal profit, and also there have been an improvement in the cost impact. Therefore, we are able to achieve improvements through the rationalization, and therefore, we have seen the improvement of profitability. Thank you very much. Next, we would like to invite Mr. Ishiguro, please. Thank you very much. First of all, I would like to extend my gratitude to all of you for being with us today, and I would like to explain the consolidated full year projection. For the third quarter, I would like to talk about the projection for the third quarter of the fiscal year March 2019.
For the passive components, there had been a fluctuation according to the market for the automobile industry. However, having said that, we do have a strength in powertrain, and also there have been an improvement of demand for the ADAS. Therefore, we are seeing a favorable growth. Therefore, it will give a steady improvement to our business. For the capacitors, we are expecting that we are going to increase the sales, and therefore, we believe that we will have a steady improvement. For the inductive device, focusing on that, we are increasing the sales. For the passive components, we expect an increase of 1%-3%. For the Sensor Application Products, because of the impact of emission test implementation, there have been a decline in the orders for the temperature and pressure sensors.
However, on the other hand, the Magnetic sensors sales to the ICT will be having the seasonality impact. For the MEMS sensors, from the second quarter, we expect a slight increase. Therefore, as a result, in total, we expect a flattening in the third quarter. For the Sensor Application Products projection, we expect that we are going to increase by 30%. We have already explained it. Therefore, in the latter half of this year, we are going to have a delay in the launch of the new products, and therefore it will be taking more time. For the Magnetic Application Products, for the HDD head shipment index, from the second quarter, from 97 to the third quarter, we expect a decline to 87, decline of 10%.
However, the sales of HDD suspension will have a flattening effect. We expect the Suspension Application Product sales to have a full sales, and therefore, for the suspension as a whole, we expect there will be a growth. For the magnetic products, we expect it's going to be flat. However, for the Magnetic Application Products, we expect a decline of 5%-7% in the third quarter. For the Energy Application Products, we are able to have the increase to North America. On the other hand, for the Chinese sales, we expect a decline and also non-smartphone sales is expected to decline slightly. Therefore, as a result, we expect this to be flat in the third quarter. For the power supply for the industrial usage, the industrial market itself is having a slight recession. Therefore, we expect a slight decline.
For the Energy Application Products as a whole, we expect it's going to be almost flat. Therefore, as a total, the net sales, in comparison to second quarter's JPY 378.9 billion, we expect a decline of 1%-3%. Lastly, I would like to expect the full year projection. Based on the actual results of the first half and also looking at the trend in the latter half, as we have announced at the beginning of the year, we have revised our forecast. The net sales for full year, JPY 1.42 trillion, operating income, JPY 120 billion, income before tax, JPY 114 billion. Therefore, net income, JPY 80 billion. Therefore, we would like to revise upwards. For the dividend, in the first half, we are going to increase by JPY 10 from JPY 70 to JPY 80. In the latter half, we expect the dividend payment to be JPY 80.
Therefore, we are going to pay JPY 160 for the full year, therefore increase of JPY 20. The currency exchange rate is forecasted to be around JPY 110 to the USD and JPY 130 to the EUR. Therefore, we are expecting that the exchange rate will be almost as the first half. For the full year forecast, therefore, we are able to achieve more than we had expected in the first half. In addition, in the latter half, they'll be up and down according to the segments. However, as a whole, we are not going to revise upward nor downward. Therefore, we expect the revision as I have explained. That concludes my explanation. Thank you very much.