TOKYO, July 30, 2015 - (JCN Newswire) - Showa Denko (SDK) (TOKYO: 4004) announces that the actual financial results for the first half of 2015 reported today are different from the forecast announced on May 8, 2015. Based on that and, taking into consideration the recent business trends, SDK have revised its performance forecast for full-year 2015 which was announced on February 12, 2015.
1. Difference between forecast and actual consolidated business results for Jan. 1 - June 30, 2015
(Millions of yen, excepting net income per share)
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Net sales Operating Ordinary Net income Net income
income income per share(y)
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Earlier forecast (A) 403,000 13,000 11,000 (2,000) (1.40)
(Announced on May 8, 2015)
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Actual results (B) 396,980 16,109 15,500 1,280 0.90
(Announced on July 30, 2015)
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(B) - (A) (6,020) 3,109 4,500 3,280
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Percentage of changes (1.5%) 23.9% 40.9% --
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First half 2014 results 413,384 10,533 7,201 (3,436) (2.30)
(Reference)
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2. Reasons for the difference
Net sales decreased from the earlier forecast due mainly to lower-than-expected sales in the Electronics segment, in which the shipment volumes of hard disk media were lower than expected, notwithstanding higher-than-expected sales in the Petrochemicals segment, in which the prices of ethylene and other products in the East Asian market were higher than expected. Operating income increased from the earlier forecast. The Petrochemicals segment recorded much increase in operating income due to rising market for petrochemical products. Operating income from the Chemicals, Inorganics, Aluminum and Others segments also increased. On the other hand, Operating income from the Electronics segment was lower than expected due to decreased shipment volumes of HD media and loss on write-down of rare earth inventory to reflect weakening market prices of rare earths caused by the removal of export duties by the Chinese Government. Ordinary income and net income were higher than expected due to the increase in operating income.
3. Revised forecast of consolidated business results for Jan. 1 - Dec. 31, 2015
(Millions of yen, excepting net income per share)
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Net sales Operating Ordinary Net income Net income
income income per share(y)
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Earlier forecast (A) 900,000 40,000 34,500 15,000 10.50
(Announced on Feb. 12, 2015)
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Revised forecast (B) 825,000 40,000 37,000 10,000 7.00
(Announced on July 30, 2015)
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(B) - (A) (75,000) 0 2,500 (5,000)
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Percentage of changes (8.3%) 0.0% 7.2% (33.3%)
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2014 results 876,580 20,915 22,102 3,500 2.38
(Reference)
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4. Reasons for the revision of full-year consolidated performance forecast
As for the full-year performance forecast, net sales will decrease. Sales in the Petrochemicals segment will decrease due to the lower-than-earlier-forecast tendencies in sales prices of products, reflecting the fall in raw naphtha prices. Sales in the Electronics segment will be lower than the earlier forecast due to lower-than-expected shipment volumes of HD media. Sales in the Others segment will be lower than the earlier forecast due to the lower sales in Shoko, Co., Ltd.'s steel related transactions in China.
Operating income will be at the same level as that of the earlier forecast. Operating income from the Petrochemicals segment will be increased due to the improved profitability of exports of main products, in addition to the full capacity operation of our ethylene plant in order to respond to the improvement in the relation between supply and demand in the East Asian market. On the other hand, operating income from the Electronics segment will be lower than the earlier forecast due to the decrease in shipment volumes of HD media during the first half of the year and loss on write-down of the inventory of rare earth magnetic alloys, both of which we will not be able to recover with our efforts in the second half of 2015. Operating income from the Inorganics segment will also be lower than the earlier forecast due to the lower-than-expected performance of our graphite electrode business.
Ordinary income is expected to increase due to improvements in the equity in earnings of affiliates and other financial income.
Net income will decrease due mainly to the posting of provision of allowance for doubtful accounts, which was posted in the first quarter of 2015 in relation to Shoko, Co., Ltd.'s steel related transactions in China, and it is expected that we will not be able to recover their influence through our efforts in the remaining period of 2015.
Contact:
IR Office, Finance & Accounting Department
Phone: 81-3-5470-3323
Topic: Press release summary
Source: Showa Denko K.K.
Sectors: Chemicals, Spec.Chem
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