February 8, 2008
Sumitomo releases consolidated nine-month financial report
Sumitomo Chemical Company reported its nine months financial results ended in December 31, 2007. The Group posted sales of JPY1,391 billion, an increase of JPY94.8 billion over the previous year. Operating income was JPY85.5 billion and net income was JPY40.5 billion, all of which represent a decrease compared with the previous year owing to the increased raw material costs such as depreciation costs and R&D expenditures.
In the Basic Chemicals segment, sales for caprolactam and acrylonitrile, raw materials for synthetic textile fibers increased thanks to improved market conditions. Sales of methyl methacrylate and other products also saw a rise because of higher selling prices. As a result, sales increased JPY 5.8 billion over the previous year to JPY 234.0 billion, while operating income remained almost flat year on year at JPY 9.6 billion because of increased raw material and fixed costs that offset improved margins for methyl methacrylate and other products on the back of a market rise.
In the Petrochemicals & Plastics segment, sales of synthetic resins increased as a result of domestic selling price increases taken in response to the rising prices of feedstocks such as naphtha. Sales of petrochemical products also increased with higher market prices reflecting high feedstock costs. Sales increased JPY 43.1 billion over the same period last year to JPY 440.9 billion, while operating income decreased by JPY 13.2 billion to JPY 4.3 billion, showing the effects of rising prices for raw materials exceeding selling price increases as well as a large scale periodical maintenance shutdown of manufacturing plants occurring once in four years.
The Fine Chemicals segment saw sales increases due to marketing drives for pharmaceutical intermediates. Sales increased JPY 0.6 billion year on year to JPY 69.6 billion, while operating income decreased JPY 0.9 billion to JPY 9.1 billion because of high feedstock prices.
In the IT-related Chemicals segment, sales increased thanks to higher sales volumes for polarizing film and color filters, materials for liquid crystal displays (LCDs), driven by a production capacity increase in Korea. Though the decline in selling prices moderated somewhat starting this fiscal year, it represented a considerable decrease compared with the same period the previous year. Shipments of light diffusion sheets, liquid crystal polymers and other materials remained firm, boosting sales. Sales increased JPY 15.8 billion year on year to JPY 214.0 billion, and although operating income has begun to recover considerably heading into the second half, it declined year on year by JPY 8.4 billion to JPY 0.2 billion because of depressed selling prices for polarizing film along with increased fixed costs caused by capacity expansions.
In the Pharmaceuticals segment, sales of Dainippon Sumitomo Pharma's four main products, Amlodin (therapeutic agent for hypertension and angina), Gasmotin (gastroprokinetic), Meropen (carbapenem antibiotic), and Prorenal (vasodilator) remained firm. Sales increased JPY 3.8 billion year on year to JPY 179.2 billion, while operating income decreased by JPY 4.1 billion to JPY 38.6 billion because of increased fixed costs such as R&D expenditures.
The Agricultural Chemicals segment posted an increase for its feed additive sales owing to increases in selling prices, active marketing drives and firm overseas shipments of household insecticides. Meanwhile, domestic shipments of agrochemicals in the second half showed a recovery. Sales increased JPY4.3 billion over the same period last year to JPY142.6 billion while operating income decreased by JPY1.7 billion to JPY11.4 billion owing to high raw material prices as well as one-time costs associated with the integration of Sumitomo Chemical Takeda Agro Co Ltd.
In the Others segment, the Company provides electrical power and steam, services for chemical plant engineering and design, transport and warehousing, and materials and environmental analysis. Sales in our chemical plant engineering and design services subsidiary increased with progress on the Rabigh Project, a project for the construction of an integrated refinery and petrochemical complex in Saudi Arabia. Sales increased JPY 21.3 billion over the previous year to JPY 110.6 billion, while operating income declined JPY 1.5 billion to JPY 3.4 billion.
In addition to the decrease in operating income, extraordinary gains on the sale of securities decreased from the same period last year. As a result, net income decreased by JPY 32.4 billion compared with the same period over the previous year, to JPY 40.5 billion.
Results of operations
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9 Months ended
Millions Yen US$ 1,000 Millions Yen
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Net Sales 1,390,983 12,185,572 1,296,206
Operating Income 75,944 665,300 105,404
Income Before Income Taxes and
Minority Interests 89,768 786,404 140,567
Net Income 40,483 354,647 72,914
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Net income per 1,000 shares JPY 24,516 US$ 215 JPY 44,142
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Financial position
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As of As of
12/31/2007 3/31/2007
Yen US$ 1,000 Yen
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Total Assets 2,362,641 20,697,687 2,324,906
Total Net Asset 1,016,234 8,902,619 1,030,521
Book Value per 1,000 shares JPY 471,225 US$ 4,128 JPY 479,872
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Cash flows
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9 Months ended
Millions Yen US$ 1,000 Millions Yen
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Cash flows from
operating activities 105,141 921,078 -
investing activities (173,626) (1,521,034) -
financing activities 41,132 360,333 -
Cash and cash equivalents
at end of period 99,200 869,032 -
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Results of Operations by Business Segment
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3 Months ended
Millions Yen US$ 1,000 Millions Yen
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Net Sales
Basic Chemicals 234,028 2,050,180 228,195
Petrochemicals & Plastics 440,867 3,862,173 397,768
Fine Chemicals 69,571 609,470 68,962
IT-related Chemicals 214,030 1,874,989 198,213
Agricultural Chemicals 142,595 1,249,190 138,246
Pharmaceuticals 179,249 1,570,293 175,475
Others 110,643 969,277 89,347
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1,390,983 12,185,572 1,296,206
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Operating Income
Basic Chemicals 9,646 84,503 9,501
Petrochemicals & Plastics 4,292 37,600 17,483
Fine Chemicals 9,085 79,588 9,984
IT-related Chemicals 178 1,559 8,590
Agricultural Chemicals 11,433 100,158 13,162
Pharmaceuticals 38,580 337,976 42,696
Others 3,413 29,899 4,912
Elimination (683) (5,983) (924)
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75,944 665,300 105,404
