Japan
July 29, 2016

The Sumitomo Chemical Group’s consolidated financial results for the first quarter ended June 30, 2016 were as follows. Sales decreased by ¥100.0 billion compared with the same period of the previous fiscal year, to ¥456.6 billion. The Group posted operating income of ¥25.3 billion, ordinary income of ¥25.8 billion and net income attributable to owners of the parent of ¥12.2 billion, all representing year-on-year decreases.

The Sumitomo Chemical Group’s financial results by business segment for the first quarter ended June 30, 2016 were as follows.

Petrochemicals & Plastics
Market prices of petrochemical products and synthetic resins declined because of lower feedstock prices. Shipments of petrochemical products decreased due to the restructuring of the petrochemical business at the Chiba Works. The stronger yen had a negative effect on sales from overseas subsidiaries in yen terms. As a result, the segment’s sales decreased by ¥61.5 billion compared with the same period of the previous fiscal year, to ¥137.0 billion. Operating income declined by ¥5.2 billion, to ¥1.8 billion.

Energy & Functional Materials 
Market prices of aluminum fell sharply. Shipments of resorcinol, a raw material for adhesives, and engineering plastics increased due to a rise in demand. As a result, the segment’s sales decreased by ¥5.5 billion compared with the same period of the previous fiscal year, to ¥47.0 billion. Operating income increased by ¥0.7 billion, to ¥0.7 billion.

IT-related Chemicals
Although selling prices of touchscreen panels declined, shipments increased due to growth in demand. Selling prices of polarizing film also dropped, and shipments declined as well. The stronger yen had a negative effect on sales from overseas subsidiaries in yen terms. As a result, the segment’s sales decreased by ¥18.1 billion compared with the same period of the previous fiscal year, to ¥86.0 billion. Operating income declined by ¥5.9 billion, to ¥1.4 billion.

Health & Crop Sciences
Sales of the feed additive methionine dropped due to lower market prices. Shipments overseas of crop protection chemicals declined. The stronger yen also had a negative effect on sales. As a result, the segment’s sales decreased by ¥18.0 billion compared with the same period of the previous fiscal year, to ¥64.0 billion. Operating income declined by ¥7.0 billion, to ¥9.1 billion.

Pharmaceuticals
In Japan, although sales of Aimix® (anti-hypertension drug), Trerief® (therapeutic agent for Parkinson’s disease) and other drugs increased, overall sales declined due largely to the impacts of Japanese National Health Insurance drug price revisions and a decrease in shipments of patent-expired originator drugs. In North America, sales of Latuda® (atypical antipsychotic) and other drugs increased steadily. The stronger yen had a negative effect on sales from overseas subsidiaries in yen terms. As a result, the segment’s sales grew by ¥5.5 billion from the same period of the previous fiscal year, to ¥111.7 billion. Operating income rose by ¥9.5 billion, to ¥15.3 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 decreased by ¥2.5 billion compared with the same period of the previous fiscal year, to ¥10.9 billion. Operating income declined by ¥0.3 billion, to ¥0.8 billion. Equity in earnings of affiliates decreased by ¥4.6 billion compared with the same period of the previous fiscal year, to ¥10.2 billion. Earnings of Petrochemical Corporation of Singapore remained strong due to higher profit margins, while earnings of Rabigh Refining and Petrochemical Company (Petro Rabigh) deteriorated due to a delay in a restart of operation after periodic plant maintenance.

Complete report

Website: http://www.sumitomo-chem.co.jp

Published: July 29, 2016