Tosoh Reports First-Quarter Consolidated Results for Fiscal 2021

August  03,  2020 –

Tokyo, Japan— Tosoh Corporation is pleased to announce its consolidated results for the first quarter of fiscal 2021, from April 1, 2020, to June 30, 2020. The company’s consolidated net sales totaled ¥156.5 billion (US$1.4 billion), down ¥36.3 billion, or 18.8%, compared with consolidated net sales in the first quarter of fiscal 2020. The decrease was attributable to a global-scale contraction in demand caused by the spread of coronavirus infection, which led to sudden decreases in naphtha prices and deterioration in overseas market conditions.

Operating income also decreased, ¥17.0 billion, compared with operating income in the same period the preceding year, resulting in a loss of ¥900 million (US$8.4 million). The decrease resulted from the worsening trade conditions, which included a decline in sales volume and sales prices that exceeded the effect of decreasing raw fuel prices. Despite a decrease in foreign exchange losses, ordinary income fell ¥15.9 billion compared with ordinary income for the first quarter of fiscal 2020, resulting in a loss of ¥500 million (US$4.6 million). And net profit attributable to owners of the parent company decreased ¥11.1 billion, resulting in a loss of ¥2.0 billion (US$18.6 million).

During the first quarter of fiscal 2021 (April 1, 2020 to June 30, 2020), the Japanese economy has been impacted by the spread of coronavirus infection. Economic and social activity has been restricted, personal consumption and exports plunged suddenly, and employment conditions and capital spending have weakened. The impact of the coronavirus has also affected the global economy, pushing it rapidly toward a recession. As it is extremely difficult to predict when the situation will begin to normalize, there are concerns over potentially prolonged economic stagnation on a global scale.

Results by business segment

Petrochemical Group

Petrochemical Group net sales fell ¥18.8 billion, or 44.6%, to ¥23.4 billion yen (US$217.5 million), in the first quarter of fiscal 2021, compared with group net sales in the first quarter of fiscal 2020. Operating income likewise declined, ¥5.9 billion, resulting in a loss of ¥3.1 billion (US$28.8 million).

Shipments of olefin products, such as ethylene and propylene, decreased in line with scheduled maintenance. Shipments were also affected by decreased demand—particularly for cumene—due to the impact of the spread of coronavirus infection. And product prices also fell, reflecting decreased prices for raw materials such as naphtha and declining overseas product market conditions.

Both domestic and export shipments of polyethylene resin decreased in line with falling demand caused by the spread of the coronavirus. And product prices decreased, reflecting lower prices for naphtha. Exports of chloroprene rubber, particularly to Asia, decreased due to demand being suppressed by the spread of the coronavirus.

Chlor-alkali Group

The Chlor-alkali Group’s first-quarter 2021 net sales decreased ¥14.7 billion, or 20.3%, to ¥57.5 billion (US$534.4 million). The group’s operating income also fell, ¥8.4 billion, resulting in a loss of ¥4.9 billion (US$45.5 million).

Shipments—primarily exports—of caustic soda increased in line with increased production. Product prices declined, reflecting the worsening of overseas market conditions. Vinyl chloride monomer (VCM) shipments rose due to an increase in production. Domestic and export shipments of polyvinyl chloride (PVC), with demand falling due to the spread of the coronavirus, decreased. And PVC product prices decreased, reflecting falling naphtha prices and deteriorating market conditions overseas.

Shipments of cement decreased as domestic demand remained sluggish.

Domestic and export shipments of methylene diphenyl diisocyanate (MDI) were driven downward by reduced production volume and a decline in demand caused by the coronavirus. And worsening overseas market conditions caused a drop in product prices. Both domestic and export shipments of hexamethylene diisocyanate (HDI) hardener, which is used primarily in urethane paints, decreased in line with flagging demand resulting from the spread of infection from the coronavirus.

Specialty Group

First-quarter fiscal 2021 net sales by the Specialty Group decreased ¥1.9 billion, or 4.2%, to ¥44.7 billion (US$415.4 million), compared with group net sales in the same period of the previous fiscal year. The group’s operating income, too, decreased, ¥2.0 billion to ¥4.9 billion (US$45.5 million).

Both domestic and export shipments of ethyleneamines decreased in line with sluggish demand caused by the spread of coronavirus infection.

https://www.tosoh.com/news-press/news-releases/2020/tosoh-reports-first-quarter-consolidated-results-for-fiscal-2021tosoh%20reports%20first-quarter%20consolidated%20results%20for%20fiscal%202021