Thank you very much for waiting. It's on time, so I'd like to start the performance briefing, the first half of the FY March 2018, TDK Corporation. Thank you very much for joining us today. First of all, let me introduce the speaker today from TDK Corporation, President and CEO, Mr. Shigenao Ishiguro. Vice President, Hiroyuki Uemura. Mr. Noboru Saito, Managing Director and Corporate Officer. Senior Vice President, Tetsuji Yamanishi. These four are the speakers today. Thank you very much. Thank you. First of all, I'd like to present the consolidated results for the first half of the FY March 2018. Presenter is Mr. Yamanishi. Please. I'm going to present the consolidated results of the first half of FY March 2018.
First of all, the highlights of this, the business performance of the first half, the net sales have recognized that's the all-time high both on a semi-annual and quarter basis. Announce the net sales of the first half at 7.7% increase year-on-year for operating income. Although we have JPY 7.2 billion of a one-time acquisition expenditure for the InvenSense, but still, we could have the same level of operating incomes from the year-on-year. With expansions of the profits of the existing business, we could offset another part of the impacts of the transfer business of the high-frequency component business. Also, including and excluding that one time, the cost, now we could have achieved that record high level of incomes in the past.
For the passive component business, we could steadily meet the strong demands of the automotives and industrial equipment markets. On top of that increase of volumes, but also by expansion of the highly functional products. We could have solidified the basis of the business, also, now we could have higher than a 10% of operating income margins even after the transfer of the product business of a high-frequency business. For the Magnetic Application Products, in total, the demands of HDD was within expectations, also with the steady sales of HDD sales. But on top of that, now we could have increased the volumes of sales of suspension due to the acquisition of Hutchinson, so that now we could have a very steady base for the business.
In the magnets and the power supply products, now we could have the very good high demands of the industrial equipment markets and semiconductor manufacturing equipment or robotics. Due to that, the push of demands the renewable energies, now we have at the high end in revenues as well as profitability. We have the growth in both. The net sales and the profits. For the rechargeable batteries, now for the smartphone and tablets, the sales have been favorable. Also we could have the new application demands, including the gaming equipments and the drones. Also, now we could have a very good penetrations to the polymer battery and PCs. It has been sped up. That's why we have a dramatic increase of the sales volumes both in the quarterly and the semi-annual basis.
Now we could also recognize that is a record high and net sales as well as operating income. Based on the transformations of the business portfolios, the Sensor Systems Business Company is the basis of this strategy. We have established the Sensor Systems Business Company, and we established in April. Now based on this new organization, we try to fuse the sensing core technology, material technology, IC technology, and packaging technologies. Based on the new technologies acquired by the InvenSense acquisition, we try to expand the business by providing highly functional and high added-value products. Next, let me move on to the outline of our corporate business performance in the first half. Net sales was JPY 626.6 billion, which is JPY 44.4 billion up and 7.7% up year-over-year.
Operating income was JPY 42.3 billion and minus JPY 2 billion year-over-year, and -4.5%, but slightly declined year-over-year. This included, as I mentioned earlier, the JPY 7.2 billion of a one-time expense for the acquisition. Actually, on an apples-to-apples basis, we could secure the higher level of operating income year-over-year. Operating income was this income ratio, the margin was 6.8%, but excluding that one-time expenditure, operating income margin was 7.9%. Now, we could have a better profitability than last year. When it comes to the income before income taxes, JPY 44.3 billion. Net income in the first half was minus JPY 2 billion, as well as operating income, and then -6.1%, impacts are slightly lower than a year-over-year.
Also, even including that in a one-time cost of acquisition, we could almost offset this negative impact of the transfer business and high-frequency component business. As a result of that, now we have JPY 243.15 billion for the earnings per share. Average foreign exchange rate was JPY 111.08 to the dollar and 5.4% depreciation of the yen, JPY 126.16 to the euro, 6.6% depreciation of the yen. As a result of that, now the exchange impact was JPY 27.44 billion in increase, positive in the net sales and JPY 5 billion for the positive operating income. When it comes to sensitivity, is that now a 1 JPY change at the dollar, whereas the JPY 1.2 billion and operating income for the euro, that is the JPY 200 million impact of the change of the euro to 1 JPY. This is the sensitivity of the foreign exchange.
Next. Excuse me, please. Okay. Next, let me explain about the segment-wise performance. From this fiscal year, we have established new Sensor Application Products segment. This is a new segment, so that is why we have some recasting of the segments, partially. For the passive component business, we changed it, that is the net sales of last year was decreased by JPY 4.7 billion on operating income and pushed down by JPY 1 billion. This is where they revised that last year's performance, the sales of the passive components were JPY 215 billion and 20.9% decline from last year year-over-year. Operating income was JPY 22.6 billion and is 34.5% less than last year. Operating income margin was 10.5%.
As for the ceramic capacitors, and due to the strong demand in automotive markets, and still we have a very favorable business in the automotive markets, and we have the positive growth in both the net sales and the profits. Also, we have dramatic improvements in profitability. When it comes to inductive devices, and due to that inventory adjustments of the major smartphone manufacturers in China. Although we have the decline in the top lines of the ICT market sales, we have very good business for the automotive markets, including the ceramic capacitors and also industrial robots, and that's also the other. Healthcare and then renewable energies and the robots and all those segments have been favorable and this could offset the negative impacts on that.
Due to the high-frequency components, we have dramatically declined in both stats and the net sales and the profit due to the transfer of the part of the business. We don't have any WiFi module business, and that wasn't there in the last year. That's why they pushed down the top line and the profit, a large margin. We could have a high profitability due to the ceramic filter business. When it comes to piezoelectric components, we have a good business for the industrial equipments and the consumer's components so that they have a positive growth in both net sales and profits. For the high-frequency business, and due to the transfer of the business, we have JPY 70 billion and also 20% of that operating income and the negative impacts we have due to the transfer.
We could not offset all of these negative impacts, we have steadily increasing and pushing up the profitability of the existing business. Next, let me talk about the sensor application product business. In this segment, as also explained in the last meeting, in the temperature and the pressure sensor, the magnetic sensor, MEMS sensor, these are three sub-components of the business. Due to the segment recasting with these new segments, we also revised that last year's performance and JPY 20.9 billion in net sales and also the operating income was JPY 2.8 billion of the net operating loss. When it comes to the current state of the business, the sales was JPY 36.6 billion. It amounts to 1.8 times as much as the top line year-on-year, and operating income was JPY 10.6 billion of the operating loss.
Due to the consolidation of InvenSense, we have JPY 12 billion more of the top line and in the first half. Also, when it comes to valuation of goodwill due to these acquisitions, we're still working on it, as I mentioned in the last meeting. In the first half, we have recognized JPY 7.2 billion, including the depreciation and another acquisition relevant cost, and this is due to that inventory asset revaluation. Temperature and pressure sensors have the higher proportion of business and of the automotive markets. We have increased it by the sales and 17%, and particularly in the European and the domestic market in Japan. TMR sensor have started its full-fledged sales and to the ICT market and starting to make a contributions.
When it comes to the net sales of a MEMS sensor, it accounts for about one-third of the total sensor application products. The sales for the ICT market account for over 60%, that is close to 40% is for the industrial equipment market, including drones. Operating income of this segment have been almost flat, if we exclude that one-time acquisition cost of JPY 7.2 billion. Let me talk about the Magnetic Application Products business. Due to the product and segment recasting, the last year's performance declined by JPY 10.1 billion, on the other hand, operating income increased by JPY 5.8 billion. The current business of this segment is that net sales were JPY 165.6 billion, 6% positive year-on-year, operating income was JPY 11 billion, 11.1% increase year-on-year. Operating profit margin was 6.6%.
When it comes to HDD heads, although the sales volume has slightly declined year-on-year, we have dropped the business of the HDD assembly sales for the captives. That is why in the top line of a decline, on the other hand, we consolidated the wafer basis, also for that, improvements of the cost structure of the HDD nearline product. That is why profitability improved. When it comes to suspensions, due to the consolidation of Hutchinson, made contributions that pushed up the top line by 50%. As for the magnets, HDD demand has declined, that is why the sales volumes of the HDD magnet have declined accordingly.
On the other hand, the demands for wind power generations or industrial robots or industrial equipment motors, these are the areas that the sales have been favorable. That is why we still have the loss. The level of loss has cut in half and steadily improving the base of the business. When it comes to power supplies, for the semiconductor manufacturing equipment and the measuring devices and the robotics, these are all providing very high demand. We have records and increased revenues for both net sales and profits.
Moving on to the Film Application Products. Net sales were JPY 183.2 billion. Operating income was JPY 34 billion. Year-on-year basis, actually 56.6% and 69.2% respectively. As for the operating income margin, 18.6%. We are able to maintain a very high level of profit in sales in the mobile devices. It actually turned out to be much stronger than we had expected in the beginning, we are able to actually increase sales vis-à-vis the Chinese customers. Also the accelerated lithium-ion polymer battery, the exchange and exchanging effects impact, as well as the M&A one-time expense. Excluding them, we are actually on par to the profit of JPY 44.5 billion. The Japanese yen became cheaper and given us the positive impact by JPY 5 billion. Also the one-time expense from M&A, JPY 7.2 billion.
Put them together, our profit went down by JPY 2 billion. Moving on to the consolidated numbers for the second quarter. The net sales of JPY 334 billion. This was up 11.2% from the previous year. On the quarter basis, we're able to record the record high numbers. Operating income, JPY 26.6 billion or up 4.3% year-on-year basis. In this second quarter, of course, we had JPY 3.7 billion for the M&A one-time expense. In substance, actually, we are able to achieve the profit from the previous year. As for the operating income and margin, 8%, excluding the one-time expense. Looking at the substance, actually, it was 9.1%. We're able to actually absorb the negative impact coming from the transfer of the high-frequency components. Net income, JPY 19.7 billion, down 3%.
Moving on, I like to actually go through the changes from the fourth quarter to the second quarter. In terms of the operating income. First, I would like to explain the passive component segmentations. Net income actually in our first quarter, JPY 8 billion. Actually, it became JPY 8 billion from the first quarter, up 7.7%. Ceramic capacitors, thanks to the automotive firm business . On top of that, we had really good performance in the renewable energy, as well as the industrial robotics, as well as the aluminum electrolytic capacitors helped us to increase numbers. Inductive devices actually went up by 7.7% from the first quarter. Just like ceramic capacitors, thanks to the firm business in the automotive market, also thanks to the firm sales number helped us to improve the smartphone businesses. Operating income in the passive components actually became JPY 2.2 billion from the first quarter, up 21.6%.
Capacitors actually volume increased. Also, we are able to increase the productivity, resulted in the overall improvement in the profitability. Allow me to move on to the sensor application product segmentation. Revenue-wise, JPY 3.8 billion and up 23.2%. TMR sensors increased, particularly in the smartphone space. Also InvenSense became fully consolidated starting from the second quarter. They are the major factors behind the good number of sales. Operating income, actually down JPY 1.5 billion. This can be explained by the one-time expense, actually went up JPY 200 million in the first quarter. Also, we actually advanced R&D the budget for the MEMS sensors and others. Also, the InvenSense actually became fully consolidated starting from the second quarter, they are the major factors behind the right numbers.
Moving on to the Magnetic Application Products segmentations, the revenue actually became JPY 5.6 billion improvement from the first quarter, up 7%. Recording devices, the sales, also the HDD head shipments actually increased slightly, the full-term HDD volume actually increased, giving us JPY 5.1 billion or up 9%. As for the other Magnetic Application Products, from the first quarter, it grew JPY 400 million or up 1.7%. Industrial robotics, also the industrial businesses, particularly for the measurement, we had a really good performance with the magnet products as well as the power supply products. From the first quarter, actually, this segmentation shows the improvement by the JPY 1.3 billion.
In regard to the HDD head, we are able to increase the marginal profit due to the increase in volume, and also magnetic ferrite products, we are able to improve the profitability, and also that is also applicable to the power supply products. Film Application Products, actually, revenue actually went up JPY 23.8 billion or up 29.9%. For the smartphone and tablet businesses, actually, we are able to increase the overall volume. And also, there has been accelerated replacement of the polymer batteries in the personal computers. And also, we were benefited thanks to the good businesses in the game business and others. Operating income actually from the first quarter and JPY 12.7 billion and up JPY 8.6 billion and becoming JPY 21.3 billion. We are able to enjoy the good improvement in the marginal profit, and also we are able to reduce the overall cost structure. This concludes my presentation.
Thank you indeed for your kind attention. I would like to move on to the forecast from the full year prospectus. Presenter here is going to be Mr. Ishiguro.
Thank you. This is Ishiguro. I would like to thank you for your precious time despite your busy schedule, being with us. Thank you indeed. I would like to actually explain our forecast, looking into the full year and FY March 2018. I would like to look at in the third quarter, the changes and ups and downs at high level. Passive components. The automotive cells enjoyed a good and firm growth in Europe and in China also. Furthermore, industrial equipment will be quite firm. Help us and to grow by 2%-5%.
Prediction and the pressure sensors, as well as the magnetic sensors, particularly in the automotive marketplaces, are going to actually rise. We do expect there is some positive trend. It is going to be flattening out from the second quarter. Overall, we do believe that growth is going to be from 2%-5%. Magnetic Application Products. In regard to the HDD head, HDD TAM actually has been revised from previous 400 million to 390 million. As for the HDD head shipment index, in the second quarter, 102, and in the third quarter, 94, so down about 8%. As for the suspension, we do believe that there is going to be a solid increase in volume. On top of that, in ICT marketplaces, as well as in fine-pitch electronic components are going to be moving into the full swing.
I believe that revenue is going to go up. As for the magnetic products, as well as in the power supply products, we do believe that we are going to benefit by the firm business conditions in the industrial equipment market. Overall, due to the decline in the HDD head, probably the growth is going to be a negative 4%-7%. Allow me to move on to the Film Application, the rechargeable batteries. We are going to have the full shipments and going to the customers in North America, being launching new devices. Also, we have a good expectations vis-à-vis the Chinese customers. Having said that, in the second quarter we had advanced order as much as JPY 7 billion in the second quarter due to the Chinese National Day and holiday.
From the second quarter to the third quarter, net sales is going to grow from 1% to 3%. Actually, excluding these exceptional factors, the substantial growth rate is going to be 16%. All in all, the entire third quarter net sales is going to grow from the second quarter's JPY 334 billion. In other words, growing from 1% to 3%. Lastly, I'd like to share our projections for the full year, the performance. Our actuals in the first half, as well as the sales trends in the second half. Back in July, we announced on our full year projections, that projections has been modified. For the full year, the revenue, JPY 1,250 billion. Operating income being JPY 85 billion. Income before income taxes, JPY 88 billion. Net income, JPY 60 billion. We decided to revise those numbers up.
As for the dividend, the first half, JPY 60, the second half, JPY 70. For the full year, the dividend payment is going to be JPY 130. There is no change as for this number since the beginning. As for the average currency rate for the second half, observing the euro, due to the latest stronger euro, now the rate is JPY 127. When it comes to the Japanese yen to US dollars, there is no change. It is being set at JPY 108. As for the net income, the net sales rather, the second half, the automotive and the industrial equipment market are going to give us a strong demand continuously. The smartphone market, yes, there are certain uncertainties, I don't believe that they are going to have a major impact on our sales numbers.
All in all, we're going to revise our numbers up to JPY 60 billion for the full year. As for the operating income, we acquired InvenSense. In the previous announcement, the impact was announced JPY 9 billion. In the second quarter, we had an increase of about JPY 1 billion due to PPA depreciation and having to do with the inventory valuation. For the full year basis, it is going to be about JPY 10 billion. We would like to revise our numbers up to JPY 5 billion, thanks to the increase in net sales. Of course, we went through the details of the expenses, CapEx actually is now up JPY 10 billion, becoming JPY 170 billion. As for depreciation, up JPY 2 billion, becoming JPY 90 billion. As for R&D, the JPY 5 billion increase, becoming JPY 99 billion. With this, I'd like to close off my presentation explanation.
Thank you indeed for your kind attention.