Total sales of Toray's Fibers and Textiles drop by 6.8%
Toray Industries Inc announced its consolidated business results for the nine months ended December 31, 2008 of the fiscal year ending March 31, 2009. The following summary of the business results that Toray submitted to the Tokyo Stock Exchange is unaudited and for reference only.
Consolidated Business Results and Financial Condition
1. Overview of the Nine Months Ended December 31, 2008
During the nine months under review, the deepening financial crisis that began in the U.S. coupled with the credit crunch amid drastic fluctuations in raw materials and foreign exchange markets triggered a worldwide recession. The U.S. and European economies continued to weaken with each passing month while the trends in the emerging economies led by China pointed to a major slowdown. The Japanese economy also rapidly deteriorated beginning in the third quarter as corporate earnings fell on sluggish exports across the board, causing many to cut back capital investments and make production adjustments. Consumer spending also weakened at a rapid pace amid worsening employment and income situations.
Under such circumstances, Toray Group advanced its efforts to implement measures under the mid-term business strategies “Project Innovation TORAY 2010 (IT-2010)” launched in October 2006 and promoted business and profit expansion through business structure reform and structural reinforcement. At the same time, to cope with the increases in raw materials and fuel prices through the second quarter, the Group took action to transfer cost increases on to selling prices and shift to high value added products. It also strived to reduce capital investments, cut down expenses and streamline the operations in response to the changing economic trends.
As a result, consolidated net sales for the nine months ended December 31, 2008 declined 3.2% on a year-on-year basis to ¥1,169.0 billion (US$12,846 million). Operating income fell 31.9% to ¥43.1 billion (US$474 million) reflecting the overwhelming impact of negative factors including rising fuel and raw material prices in the first half and falling demand going into the second half. Ordinary income declined 43.1% to ¥33.6 billion (US$370 million) on decrease in equity in earnings of unconsolidated subsidiaries and affiliated companies and mounting exchange losses.
Net income came to ¥5.5 billion (US$60 million), down 82.9% due to lower levels of extraordinary gains and loss on write-down of investment securities.
Business Performance by Segment:
Fibers and Textiles - In Japan, except for some sewn products, the movement of materials for apparel applications remained sluggish on the whole, reflecting weak demand for clothing. After remaining strong through the first two quarters, sales of products for industrial applications, especially in the automotive sector, declined from the third quarter hurt by the global economic slowdown. Overseas, though suede-like microfiber textile business in Europe and nylon fiber and textile operations for air bag applications in Thailand registered strong growth through summer, the business in various regions