These harsh conditions were mainly attributable to ongoing economic disruptions caused by the European financial crisis: stagnant demand accompanying slower economic growth in China; a downturn in emerging markets; persistently high yen rates:-and rising raw material and fuel prices.
In addition, the explosion and fire at production facilities located in the Company's Iwakuni-Ohtake Works on April 22, 2012 resulted in the suspension of operations at a substantial portion of the facility.
Currently, plants in the Iwakuni area of the Works (with exception of the Resorcinol Plant, the cause of the accident, and some other plants) have resumed operations, having completed the confll1nation of safety and conditions as well as with approval from authorities. All plants in the Ohtake area have resumed routine operations.
Under these conditions, the Mitsui Chemicals Group reported the following operating results for the Quarter.
Net Sales decreased 34.4 billion yen, or 8.9%, compared with the first quarter of the previous fiscal year to 352.3 billion yen. This was mainly attributable to a 24.5 billion yen decrease in sales volume in the Basic Chemicals segment following the accident at the Iwakuni-Ohtake Works as well as a 9.9 billion yen decline in sales due to a market downturn in the Basic Chemicals segment.
Operating income was 6.9 billion yen, a decrease of 15.1 billion yen, or 68.4%, year on year. Despite the effect of the Company's cost-cutting efforts and a reduction in depreciation expenses due to a change in the depreciation calculation method, this decline was primarily the result of deterioration in terms of trade in the Petrochemicals and Basic Chemicals segments.
Ordinary income was 4.7 billion yen, a decrease of 18.6 billion yen, or 79.9%, year on year. This result largely reflected lower operating income and a 3.5 billion yen year-on-year decline in non-operating income due mainly to a decrease in equity in earnings of non-consolidated subsidiaries and affiliates.
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Mitsui Chemicals Inc
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