MOSCOW (MRC) -- Asahi Kasei reports a 39.9% year-on-year (YOY) decline in net profit for its fiscal first half, ended 30 September, to Yen 46.8 billion (USD453 million) on sales down 7.4%, to ?989.4 billion. The result reflects the impacts of COVID-19 during the six-month period, reported Chemweek with reference to Asahi's statement.
However, there was an improvement in the overall market environment during the first half due to a recovery in demand, with the company's fiscal second-quarter results exceeding those of the first quarter. Asahi’s operating income for the fiscal second quarter ended 30 September was Yen 46.7 billion, an increase from ?30.1 billion in the first quarter. Second-quarter sales were Yen 534.2 billion, up from Yen 455.2 billion in the preceding quarter.
The impact of COVID-19 has centered on Asahi Kasei’s materials business, which registered an overall decrease in net sales of 21.8% and operating income of 63.4% in the fiscal first half, to ?438.4 billion and ?20.8 billion, respectively. However, demand for various products in the materials segment recovered as the period progressed with an improved market environment especially in automotive. Firm sales of electronic materials continued. The business increased shipments of lithium-ion battery (LIB) separators and electronic materials. Lower market prices for petrochemical products and sluggish demand in automotive and apparel markets, resulting from COVID-19, helped drive the operating-income decrease, Asahi says.
In basic materials, part of the materials segment, there was an inventory-valuation loss by the gross average method due to decreased prices for feedstocks such as naphtha. In performance products, also part of the materials segment, there were decreased shipments of automobile-related products, and of fiber products for apparel applications. In specialty solutions, there were increased shipments of LIB separators, and higher shipments of electronic materials for communications infrastructure and tablet PCs, but lower shipments of automobile-related products.
In Asahi Kasei’s homes segment, expected delays in construction materialized in order-built homes due to infection-preventing measures, but deliveries proceeded more smoothly than expected. As a result, the segment's first-half operating income slipped 3.1% YOY, to ?31.7 billion but sales increased 1.6% to Yen 338.7 billion.
Operating income increased 36.6% YOY to Yen 35.4 billion in Asahi Kasei’s health care segment centered on the critical care business, which registered a firm performance, the company says. Sales grew 22.2% YOY to Yen 204.9 billion.
Asahi forecasts declines in group earnings and sales for the full fiscal year ending 31 March 2021. Net profit is expected to be Yen 87 billion, a decline of 16.3% from the previous fiscal year. The company anticipates full-year operating profit of Yen 140 billion, a decline of 21.0%. Sales are expected to be Yen 2.03 trillion, a 5.5% decrease from the previous fiscal year..
The impact of COVID-19 remains unpredictable, Asahi says. The sequential improvement trend is expected to continue in the fiscal second half, with a gradual strengthening of the market environment, particularly in automotive, it says.
In the materials segment, increased shipments and improved terms of trade for acrylonitrile (ACN) are predicted, although lower overall market prices for petrochemical feedstocks are forecast. Asahi expects a net sales and operating income increase from the fiscal first half to the second half for materials.
As MRC informed before, in March 2020, Asahi Kasei decided to discontinue its business for the styrenic resins SAN (Styrene-acrylonitrile resin), ABS (Acrylonitrile butadiene styrene), and ACS. According to the company, the operations of SAN plant at Kawasaki Works will be closed in March 2021. The business to be discontinued began with the 1962 start-up of the SAN plant in Kawasaki, now part of Asahi Kasei’s Kawasaki Works, followed by the 1964 start-up of the ABS plant at the same site (function transferred to Mizushima in 1978). The ACS business began in 1995. The ABS plant at Asahi Kasei’s Mizushima Works, which started up in 1967, was closed in 2015 due to deteriorating profitability as domestic Japanese demand decreased significantly.
According to MRC's ScanPlast report, Russia's consumption of material in the ABS segment decreased in January-September 2020 by 8% year on year, totalling 32,240 tonnes.