Performance decline! Several Japanese chemical companies announce results

Affected by the new domestic outbreak of pneumonia in Japan, major Japanese chemical companies have postponed their results for the fiscal year 2019 (April 1, 2019 to March 31, 2020) originally announced in early May until late May or even June .

Many companies said that in fiscal 2019, many unfavorable factors such as Sino-US trade frictions, falling raw material prices, and the New Coronary Pneumonia epidemic have led to a decline in market demand, which has led to a decline in production, which has caused the performance of Japanese chemical companies to fall seriously. Mitsubishi Chemical Holdings, Sumitomo Chemicals, Asahi Kasei, Mitsui Chemicals, Teijin, Tosoh, and Ube Industries have all experienced sharp declines in profits.

Mitsubishi Chemical

Mitsubishi Chemical Holdings stated that the new coronary pneumonia epidemic has suppressed global economic activity in the fourth fiscal quarter. The company's report shows that Mitsubishi Chemical Holdings' net profit for the current fiscal year fell 68% to 54 billion yen; operating profit fell 51% year-on-year to 144.3 billion yen; sales fell 6.7%. The company said that due to the continued trade friction between China and the United States and the stagnation of market demand, the company's profits have been squeezed. The company's functional product business operating profit fell 12.1% to 62.6 billion yen; sales were 1.08 trillion yen, a 6.3% decrease. The decrease in core operating profit was mainly due to the decline in the market price of phenol-polycarbonate chain materials in the advanced polymer business and the decline in sales of engineering plastics for advanced molding and composite materials.

Mitsubishi Chemical's largest segment, the operating profit of the chemical business, fell 76% to 30.2 billion yen, compared with 127.9 billion yen in the previous year; sales were 1.05 trillion yen, a year-on-year decrease of 17%. The company said that due to weak demand for methyl methacrylate and other related market demand slump, the product sales revenue declined.

Sumitomo Chemical

Sumitomo Chemical said that the company's fiscal 2019 net profit fell 73.4% to 30.9 billion yen; sales fell 2.5% to 2.3 trillion yen. The company's largest business unit, petrochemicals and plastics business sales fell 12.4% to 662.7 billion yen; operating profit fell 76.4% to 14.4 billion yen, the profit margin of petrochemicals including MMA continued to decline because synthetic fibers The market price of raw materials and methyl methacrylate is very low. As raw material prices fall, market conditions for petrochemicals and plastics also deteriorate.

Asahi Kasei

The Asahi Kasei report shows that net profit for the fiscal year fell 29.5% to 103.8 billion yen; sales were 2.15 trillion yen, a decrease of 0.9%. The main reasons are the lack of growth in the Chinese market, the slowdown in the auto market, lower prices in the petrochemicals market, and the global economic deterioration caused by the new crown pneumonia epidemic, all of which have weakened the company's operating performance.

Mitsui Chemicals

Mitsui Chemicals’ annual financial report showed that the company’s net profit fell by 50% to 37.9 billion yen; net sales were 1.3 trillion yen, a decrease of 10%. The drop in naphtha and other raw materials and fuel prices has pushed down sales prices. The new pandemic pneumonia epidemic also affected sales. Mitsui Chemicals said that the extremely severe economic situation worldwide will lead to a decline in demand, causing fluctuations in naphtha prices and chemical product prices.

Toray

Toray's consolidated financial results were postponed until May 28. The company's net profit was 55.7 billion yen, a decrease of 29.8%; net sales were 2.2 trillion yen, a decrease of 3%. The report pointed out that due to the spread of the new crown epidemic, the settlement of accounts in Japan and overseas was delayed.

Shin-Etsu Chemical

Shin-Etsu Chemical is the only large Japanese chemical company with net profit growth. The company's net profit increased 1.6% to 314 billion yen; operating profit increased 0.6% to 406 billion yen; sales fell 3.2% to 1.54 trillion yen.

For the Japanese chemical industry under the new coronary pneumonia epidemic, the international market does not make optimistic forecasts. IHS Markit said that the Japanese government announced an economic package of 108 trillion yen in April, which aims to mitigate the adverse effects of the spread of the new crown epidemic on the economy. However, due to the significant impact of the epidemic on the global market, only domestic economic stimulus It seems unlikely to boost, Japan’s real GDP will shrink further in 2020. This is especially true for Japanese chemical companies with active overseas operations. Due to the sharp drop in global demand and the disruption of the supply chain due to the New Crown epidemic, it is expected that Japan’s exports will be reduced and private investment will be curtailed, which is likely to drive some Japanese companies to invest in fixed assets.

Due to the spread of the new crown epidemic, IHS Markit has lowered its growth forecast for the Japanese chemical industry. In addition, the sharp decline in global demand, especially in the United States and China, will affect Japan’s chemical exports and inhibit industrial production in 2020 by affecting the supply chain.