Operating income was ¥11.8 billion (US$147 million), a decrease in operating income of ¥9.0 billion, or 43.5%, from the same period in fiscal 2012. Ordinary income, meanwhile, fell ¥3.2 billion, or 17.9%, to ¥14.5 billion (US$182 million). Net income for the first nine months of fiscal 2013 totaled ¥5.5 billion (US$69 million), a decline of ¥1.5 billion, or 21.8%, from the same period in fiscal 2012.
Tosoh continued to deal with harsh conditions during the first nine months of its 2013 fiscal year. The Japanese economy demonstrated signs of recession despite being buoyed by domestic demand from earthquake recovery projects. This was largely because of a drop in external demand related to stagnation in European economies and a slowdown in China’s economy.
The company’s consolidated sales during the nine months under review suffered from more than declining demand. Tosoh also faced a softening of overseas market prices and the ongoing fallout from the accident at its Nanyo Complex’s No. 2 Vinyl Chloride Monomer Plant in November 2011.
Declining unit sales and worsening trade conditions resulting from softening market prices for ethylene and other products in turn eroded operating income for the period under review. Only a reversal of the yen’s prolonged appreciation in the latter half of the period mitigated the drop in ordinary income by improving foreign exchange translation adjustments.
Results by business segment
Petrochemical Group net sales for the first nine months of fiscal 2013 contracted ¥14.8 billion, or 9.7%, compared with group net sales for the same period the year before, to ¥138.5 billion (US$1.7 billion). The group’s operating income slid ¥3.1 billion, or 30.0%, to ¥7.2 billion (US$90 million).
Shipments of ethylene, propylene, and other olefins contracted because of lower production volume resulting from scheduled plant maintenance and other factors. Shipments of cumene also declined because of the impact of scheduled plant maintenance and as a result of a drop in demand for derivatives.
Polyethylene resin shipments were at low levels, particularly in the domestic market. Among other factors, the decline can be attributed to reduced shipments of ethylene vinyl acetate copolymer because of dropping demand for sealant film for solar cells and an increase in competitive imports. Shipments of chloroprene rubber decreased because of falling demand from Europe and Asia.
The Chlor-alkali Group’s net sales for the first three quarters of fiscal 2013 decreased ¥25.4 million, or 13.2%, compared with net sales over the same period a year earlier, to ¥166.1 billion (US$2.1 billion). The group improved its operating income by ¥1.3 billion from the nine-month period a year before but still recorded an operating loss of ¥4.7 billion (US$59 million).
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