MOSCOW (MRC) -- Sumitomo Chemical reports a 19% fall year on year (YOY) in net income to Yen 54.13 billion (USD523.0 million) for the fiscal first nine months ended 31 December 2020, on sales that declined Yen 8.1 billion to Yen 1.64 trillion, according to Chemweek.
The company does not disclose separate financial figures for the third quarter.
Net income attributable to owners of the parent company declined 41% YOY to Yen 21.94 billion, while operating profit fell 9% to Yen 116.64 billion, it says. Substantial sales declines in Sumitomo’s petrochemicals/plastics and energy/functional materials businesses in the first nine months were partially offset by increases in revenue for its pharmaceuticals, health and crop sciences, and electronic chemicals segments.
In its petchems and plastics business, Sumitomo says shipments of synthetic resins mainly for automotive use declined YOY, while a drop in market prices for raw materials saw petchem product prices hover at a lower level, due primarily to the economic downturn related to the COVID-19 pandemic. Sales plunged Yen 109.9 billion compared to the prior-year period to Yen 408.4 billion, with core operating income swinging to a loss of Yen 27.9 billion, down Yen 55.2 billion YOY. The operating loss was due mainly to lower shipment volumes, deteriorated petchem margins, and periodic shutdown maintenance at its Rabigh Refining and Petrochemical Co. (Rabigh, Saudi Arabia) joint venture with Aramco, it says.
In its energy and functional materials business, declining shipments of materials for automotive use, including separators for lithium-ion secondary batteries and synthetic rubber, resulted in a Yen 15.3 billion fall YOY in sales to Yen 175.4 billion. Core operating income fell by Yen 2.1 billion compared to the equivalent period last year to Yen 15.6 billion.
Sales rose Yen 35.3 billion YOY to Yen 417.5 billion in Sumitomo’s pharmaceuticals business, driven mainly by increased sales in Japan and North America, with core operating income increasing YOY by Yen 7.2 billion to Yen 74.7 billion.
Electronic chemicals shipments of processing materials for semiconductors, including high-purity chemicals and photoresists, increased due to growing demand, while shipment of materials for display applications also rose as a result of rising stay-at-home and tele-work demand, it says. Sales increased by ?19.3 billion compared to the prior-year period to Yen 324.3 billion, with core operating income rising by Yen 13.2 billion YOY to Yen 31.8 billion.
In the health and crop sciences business, crop protection product sales rose YOY following the acquisition in April 2020 of four Nufarm subsidiaries in South America, while shipments to India also performed well, it says. Revenue grew Yen 63.9 billion YOY to Yen 282.4 billion, with core operating income swinging to a core operating profit of Yen 12.2 billion, up Yen 25.8 billion YOY.
As MRC reported earlier, in December 2020, Sumitomo Chemical and Axens signed a license agreement of ethanol-to-ethylene technology Atol for Sumitomo Chemical’s waste-to-polyolefins project in Japan. In the project, to promote circular economy, Axens’ Atol technology will transform ethanol produced from waste into polymer-grade ethylene that will be polymerized in Sumitomo Chemical’s assets into polyolefin, a key product in the petrochemical industry.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's DataScope report, PE imports to Russia decreased in January-November 2020 by 17% year on year and reached 569,900 tonnes. High density polyethylene (HDPE) accounted for the greatest reduction in imports. At the same time, PP imports into Russia increased by 21% year on year to about 202,000 tonnes in the first eleven months of 2020. Propylene homopolymer (homopolymer PP) accounted for the main increase in imports.