Polyester Fibers segment generates sales of ¥23.8 bn – Teijin
Taijin declares qualitative information and financial statements for FY11 1Q results.
In the months since the Great East Japan Earthquake, which struck on March 11, 2011, Japan has contended with
production restrictions—a result of supply chain disruptions and of power shortages arising from damage sustained
by the nuclear power plants in Fukushima—and with flagging demand, attributable to such factors as the prevailing
mood of restraint, coupled with a general decline in consumer confidence.
The impact of the earthquake on
economic activity has of course not been limited to Japan. On another front, in the United States growth slowed, a
consequence of lackluster consumer spending, while in Europe fears grew that the fiscal crisis in Greece could
negatively affect other economies in the region, further clouding the global economic outlook. The situation was
exacerbated by excess global liquidity, which continued to push up natural resource and food prices, driving
inflation in emerging markets.
In this environment, consolidated net sales in the first three months of fiscal 2011—the fiscal year ending March 31, 2012—slipped 1.6%, to ¥189.6 billion, from the first quarter of fiscal 2010, as increased sales in the High-Performance Fibers and the Pharmaceuticals and Home Health Care segments mitigated the negative impact of such factors as the earthquake and our withdrawal from loss-making businesses, chiefly in the Polyester Fibers segment.
Having essentially completed our structural reforms in fiscal 2010, we reported operating income of ¥11.0 billion, up 36.6%. Ordinary income rose 65.2%, to ¥12.8 billion, bolstered by better results at unconsolidated affiliates accounted for by the equity method. Although we reported an extraordinary loss for earthquake-related expenses, the amount was relatively insignificant. As a consequence of these and other factors, net income advanced 55.7%, to ¥6.3 billion. Net income per share was ¥6.38, up ¥2.28 from the first quarter of fiscal 2010.
Business Segment Results
Sales in the High-Performance Fibers segment amounted to ¥26.9 billion. Operating income was ¥2.0 billion.
Demand was steady for key applications. Demand for Twaron para-aramid fibers was firm, particularly for use in automotive-related materials, protective clothing and materials and fiber optic cables. Although the Great East Japan Earthquake hindered domestic demand from some quarters for use in composite materials and civil engineering applications, Technora para-aramid fibers continued to perform well, bolstered by soaring demand overseas for automotive-related applications. Demand for Teijinconex meta-aramid fibers was brisk in the People's Republic of China (PRC) for use in filters and in Europe for use in automotive-related materials. As a consequence, all three products remained in full production. In this environment, we continued to push ahead with active efforts to cultivate new applications with the aim of further growing this business.
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