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Net income improves at Sumitomo Chemical in Q2

09
Aug '12
The Sumitomo Chemical Group’s consolidated financial results for the first quarter ended June 30, 2012 were as follows. Sales declined by ¥11.9 billion compared with the same period of the previous fiscal year, to ¥490.0 billion. The Group’s operating income was ¥13.0 billion and ordinary income was ¥12.5 billion, both representing year-on-year decreases. However, the Group posted a quarterly net income of ¥0.9 billion, improving from the year-earlier period, when the Group posted an extraordinary loss of ¥29.0 billion from a one-time amortization of goodwill related to its investment in an affiliate.

The Sumitomo Chemical Group’s financial results by business segment for the first quarter ended June 30, 2012 were as follows.

Basic Chemicals

Market prices fell for methyl methacrylate and raw materials for synthetic fibers and their shipments also decreased. As a result, the segment’s sales decreased by ¥8.8 billion compared with the same period of the previous fiscal year, to ¥66.6 billion and operating income declined by ¥9.5 billion to a loss of ¥2.5 billion.

Petrochemicals & Plastics

While market prices of synthetic resins fell, their shipments from overseas subsidiaries increased. As a result, the segment’s sales increased by ¥7.5 billion compared with the same period of the previous fiscal year, to ¥177.5 billion, and operating income declined by ¥5.7 billion, to ¥0.1 billion, mainly because of higher feedstock prices and lower selling prices.

Health & Crop Sciences

In the area of crop protection chemicals, shipments of herbicides remained strong in overseas markets, but domestic shipments decreased. Sales of the long-lasting insecticidal mosquito net, Olyset  Net, decreased due to lower demand. Market prices of the feed additive methionine declined. As a result, the segment’s sales declined by ¥4.4 billion compared with the same period of the previous fiscal year, to ¥67.2 billion, and operating income decreased by ¥1.6 billion, to ¥6.5 billion.

Others

In addition to the above five segments, the Sumitomo Chemical Group engages in supplying electrical power and steam, providing services for the design, engineering, and construction management of chemical plants, providing transport and warehousing, and conducting materials and environmental analysis. The segment’s sales rose by ¥0.5 billion compared with the same period of the previous fiscal year, to ¥11.7 billion. Operating income remained unchanged at ¥1.2 billion.

The Company has revised its consolidated financial forecast of fiscal 2012 announced on May 10, 2012. It now projects its consolidated financial forecast to sales of ¥990.0 billion, operating income of ¥27.0 billion, ordinary income of ¥18.0 billion and net income of nil for the half-year ending September 30, 2012, and sales of ¥2,050.0 billion, operating income of ¥80.0 billion, ordinary income of ¥75.0 billion, and net income of ¥30.0 billion for the full-year ending March 31, 2013. 

The Company revised its full-year assumptions for the price of naphtha from ¥65,000 per kiloliter to ¥52,000 per kiloliter, and for the yen/dollar exchange rate from ¥82.5 per dollar to ¥80.0 per dollar.

Sumitomo Chemical Group


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