Tokyo, Japan—Tosoh Corporation is pleased to announce its cumulative consolidated results for the first three quarters of its 2018 fiscal year, from April 1, 2017, to December 31, 2017.
The company’s consolidated net sales for the nine-month period under review were ¥601.9 billion (US$5.4 billion), up ¥88.5 billion, or 17.2%, from the same period of fiscal 2017. Favorable impacts contributing to the positive variance include rising markets overseas where Tosoh does business and the rise in petrochemical product selling prices in tandem with increased prices of raw materials and fuel like naphtha.
Operating income was ¥94.3 billion (US$844 million), up ¥22.8 billion, or 32.0%, from the same period one year earlier. This was due to the rise in selling prices outpacing the impact of increased raw material and fuel prices. Ordinary income increased, ¥24.2 billion, or 32.1%, compared with the same period in fiscal 2017, to ¥99.7 billion (US$893 million) due to the increase in foreign exchange gains. And profit attributable to owners of the parent company was up ¥17.2 billion, or 33.0%, to ¥69.0 billion (US$618 million).
During the nine months from April 1, 2017, to December 31, 2017, the Japanese economy showed signs of a gradual recovery with improvements in corporate earnings and domestic capital spending. There remain, however, a range of issues making it difficult to forecast the global situation, including political disarray in the US and increasing uncertainty surrounding politics in the EU, as well as geopolitical risks associated with the Korean Peninsula and the Middle East.
Results by business segment
Petrochemical Group
Petrochemical Group net sales rose, ¥21.0 billion, or 18.3%, to ¥135.4 billion (US$1.2 billion), compared with the same period the previous year. And the group’s operating income increased, ¥4.2 billion, or 30.8%, to ¥17.6 billion (US$158 million).
Shipments of ethylene, propylene, and other olefins increased with the rise in production volume due to this not being a scheduled plant maintenance year. Product prices increased, reflecting the increase in naphtha and other costs. Domestic shipments of polyethylene resin products increased, and prices increased because of higher naphtha costs. Exports and prices of chloroprene rubber increased on strong demand overseas.
Chlor-alkali Group
The Chlor-alkali Group’s net sales amounted to ¥243.0 billion (US$2.2 billion), an increase of ¥50.4 billion, or 26.1%, compared with the same period in fiscal 2017. Improved trade conditions yielded an increase in operating income of ¥18.2 billion, or 64.9%, to ¥46.2 billion (US$414 million).
Caustic soda prices rose due to domestic price corrections and improvements in international market conditions. Shipments of vinyl chloride monomer and polyvinyl chloride resin were strong, while prices for polyvinyl chloride resin increased due to price corrections in Japan and improved overseas market conditions.
Cement shipments and exports both remained strong.
Shipments abroad of methylene diphenyl diisocyanate (MDI) increased, reflecting improved overseas market conditions.
Specialty Group
Net sales by the Specialty Group increased, ¥15.7 billion, or 12.8%, to ¥138.4 billion (US$1.2 billion). Operating income increased to ¥27.1 billion (US$243 million), an improvement of ¥627 million, or 2.4%.
Ethyleneamine shipments to North America increased. Among the group’s separation-related products, liquid chromatography packing materials experienced increased shipments. The group’s diagnostic-related products likewise saw increased shipments of in-vitro diagnostic reagents.
Shipments of high-silica zeolites to North America decreased. Shipments of zirconia for use in dental materials and decorative applications, and shipments of quartz glass for semiconductor devices increased.
Engineering Group
Engineering Group net sales fell to ¥54.3 billion (US$486 million), a decrease of ¥201 million, or 0.4%, compared with the same period in fiscal 2017. Operating income decreased ¥397 million, or 23.5%, to ¥1.3 billion (US$11.6 million).
The Engineering Group’s water treatment business saw a decline in sales to general industry domestically and in Southeast Asia, and to the electronics industry in Taiwan, because of delays in investment plans for large projects from the preceding term.
Sales by the group’s construction subsidiaries increased.
Other
Other net sales increased, ¥1.7 billion, or 5.8%, compared with the same period the previous year, to ¥30.9 billion (US$277 million). Operating income increased to ¥2.1 billion (US$19 million), up ¥297 million, or 16.2%.
Sales by trading companies and other operations trended high for the period under review.
Financial Condition
Total assets for the fiscal 2018 third quarter increased over total assets at the end of fiscal 2017, rising ¥38.7 billion to ¥821.3 billion (US$7.4 billion) because of increases in notes and accounts receivable, and in investment securities.
Fiscal 2018 third-quarter liabilities declined compared with liabilities at the end of fiscal 2017, decreasing ¥19.4 billion to ¥314.9 billion (US$2.8 billion) as a result of decreases in interest-bearing liabilities.
Fiscal 2018 third-quarter net profit attributable to owners of the parent company moved up and net assets increased to ¥506.4 billion (US$4.5 billion) or ¥58.1 billion compared with the end of fiscal 2017.
Note: For reference purposes only, US dollar amounts have been translated, unless otherwise indicated, from yen at the rate of ¥111.69 = US$1, the average exchange rate during the period under review.
Outlook for the fiscal year ending March 31, 2018
The full-year fiscal 2018 consolidated financial results forecast announced on October 31, 2017 remains unchanged.
TOSOH CORPORATION
WHO WE ARE
Tosoh is the parent of the Tosoh Group, which comprises over 100 companies worldwide and a multiethnic workforce of over 12,000 people and generated net sales of ¥743.0 billion (US$6.9 billion at the average rate of ¥108.35 to the US dollar) in fiscal 2017, ended March 31, 2017.
WHAT WE DO
Tosoh is one of the largest chlor-alkali manufacturers in Asia. The company supplies the plastic resins and an array of the basic chemicals that support modern life. Tosoh’s petrochemical operations supply ethylene, polyethylene, and functional polymers, while its advanced materials business serves the global semiconductor, display, and solar industries. Tosoh has also pioneered sophisticated bioscience systems that are used for the monitoring of life-threatening diseases. In addition, Tosoh demonstrates its commitment to a sustainable future in part by manufacturing a variety of eco-products.
Stock Exchange Ticker Symbol: 4042
DISCLAIMER
This document may contain forward-looking statements, including, without limitation, statements concerning product development, objectives, goals, and commercial introductions, which involve certain risks and uncertainties. Forward-looking statements are identified through the use of the word anticipates and other words of similar meaning. Actual results may differ significantly from the results expressed in forward-looking statements.