TIDMTKK
RNS Number : 7285L
Toray Industries Inc
04 August 2011
August 4, 2011
Toray Announces Consolidated Results
for the First Quarter Ended June 30, 2011
Tokyo, Aug 4, 2011 - Toray Industries, Inc. (the "Company")
today announced its consolidated business results for the three
months ended June 30, 2011, the first quarter of the year ending
March 31, 2012. The following summary of the business results that
Toray submitted to the Tokyo Stock Exchange is unaudited and for
reference only. (Code Number: 3402)
Consolidated Business Results
(Millions of yen, millions of U.S. dollars, except per share
data)
(Reference)
First quarter ended June 30, Fiscal 2010
2011 2010 Change 2011
----------- ----------- ------- -------------
Yen % U.S. dollars Yen
------------------------ ------- ------------- -------------
Net sales Yen374,833 Yen350,362 7.0 $4,645 Yen1,539,693
----------- ----------- ------- ------------- -------------
Operating
income 27,263 16,211 68.2 338 100,087
----------- ----------- ------- ------------- -------------
Ordinary
income 29,079 14,537 100.0 360 98,888
----------- ----------- ------- ------------- -------------
Net income 17,768 8,648 105.5 220 57,925
----------- ----------- ------- ------------- -------------
Net income
per share -
Basic 10.90 5.86 - - 36.41
----------- ----------- ------- ------------- -------------
Net income
per share -
Diluted 10.32 5.52 - - 34.43
----------- ----------- ------- ------------- -------------
Consolidated Financial Condition
(Millions of yen, millions of U.S. dollars, except per share
data)
(Reference)
First quarter ended June 30, Fiscal 2010
2011 2010 2011
------------- ------------- -------------
Yen U.S. dollars Yen
---------------------------- ------------- -------------
Total assets Yen1,589,909 Yen1,595,395 $19,701 1,567,470
------------- ------------- ------------- -------------
Property, plant
and equipment,
net 536,182 567,436 6,644 531,595
------------- ------------- ------------- -------------
Net assets 661,123 618,165 8,192 640,970
------------- ------------- ------------- -------------
Equity ratio 38.4% 35.8% - 37.8%
------------- ------------- ------------- -------------
Notes:
1. For calculation of "equity ratio," minority interests are
deducted from net assets.
2. U.S. dollar amounts have been converted from yen at the
exchange rate of Yen80.7 = U.S.$1, the approximate rate of exchange
prevailing on June 30, 2011.
3. Amounts are rounded to the nearest million.
Forecast of Consolidated Results for the Six Months Ending
September 30, 2011
(Millions of yen, millions of U.S. dollars)
Six months ending September
30, 2011
Yen U.S. dollars
------------- ---------------
Net sales Yen800,000 $10,000
------------- ---------------
Operating income 60,000 750
------------- ---------------
Ordinary income 62,000 775
------------- ---------------
Net income 39,000 488
------------- ---------------
Reference: EPS forecast (six months ending September 30, 2011)
Yen23.94
Forecast of Consolidated Results for the Year Ending March 31,
2012
(Millions of yen, millions of U.S. dollars)
Year ending March 31, 2012
Yen U.S. dollars
-------------- -------------
Net sales Yen1,670,000 $20,875
-------------- -------------
Operating income 120,000 1,500
-------------- -------------
Ordinary income 120,000 1,500
-------------- -------------
Net income 74,000 925
-------------- -------------
Reference: EPS forecast (year ending March 31, 2012)
Yen45.42
Notes:
1. U.S. dollar amounts have been converted from yen at the
exchange rate of Yen80 = U.S.$1, the estimated rate of exchange
from July onwards.
2. Amounts are rounded to the nearest million.
Segment Information
(Millions of yen, millions of U.S. dollars)
Net Sales First quarter ended June 30,
2011 2010 2011
----------- ----------- -------------
Yen U.S. dollars
------------------------ -------------
Fibers and Textiles Yen142,258 Yen127,497 $1,763
----------- ----------- -------------
Plastics and Chemicals 102,983 94,165 1,276
----------- ----------- -------------
IT-related Products 64,265 63,578 796
----------- ----------- -------------
Carbon Fiber Composite Materials 18,973 15,655 235
----------- ----------- -------------
Environment and Engineering 30,137 34,586 373
----------- ----------- -------------
Life Science 13,125 11,793 163
----------- ----------- -------------
Others 3,092 3,088 38
----------- ----------- -------------
Consolidated Total 374,833 350,362 4,645
----------- ----------- -------------
(Millions of yen, millions of U.S. dollars)
Segment Income (Loss) First quarter ended June 30,
2011 2010 2011
---------- --------- -------------
Yen U.S. dollars
--------------------- -------------
Fibers and Textiles Yen10,151 Yen5,791 $126
---------- --------- -------------
Plastics and Chemicals 8,646 5,501 107
---------- --------- -------------
IT-related Products 9,473 8,299 117
---------- --------- -------------
Carbon Fiber Composite Materials 2,717 (95) 34
---------- --------- -------------
Environment and Engineering (1,362) (726) (17)
---------- --------- -------------
Life Science 1,934 1,173 24
---------- --------- -------------
Others 112 98 1
---------- --------- -------------
Total 31,671 20,041 392
---------- --------- -------------
Adjustment (4,408) (3,830) (55)
---------- --------- -------------
Consolidated Total
(Operating Income) 27,263 16,211 338
---------- --------- -------------
Notes:
1. "Others" represents service-related businesses such as
analysis, survey and research.
2. "Adjustment" of segment income (loss) for the 1st quarter
ended June 30, 2011 of (4,408) million yen includes intersegment
eliminations of 308 million yen and corporate expenses of (4,716)
million yen. "Adjustment" of segment income (loss) for the 1st
quarter ended June 30, 2010 of (3,830) million yen includes
intersegment eliminations of 294 million yen and corporate expenses
of (4,124) million yen. The corporate expenses consist of the
headquarters' research expenses, etc. that are not allocated to
each reportable segment.
3. U.S. dollar amounts have been converted from yen at the
exchange rate of Yen80.7 = U.S.$1, the approximate rate of exchange
prevailing on June 30, 2011.
4. Amounts are rounded to the nearest million.
Consolidated Business Results and Financial Condition
1. Overview of the First Quarter Ended June 30, 2011
In the period under review, while economies of developed
countries on the whole continued to recover at a steady pace, the
slow improvement in employment pulled down the pace of the U.S.
economic growth, and concerns over the financial system came to the
fore reflecting financial instability in various nations in the
euro area. China and other emerging countries continued expanding
on the back of domestic demand, though there were signs of the
economy heating up in some countries fueling inflation concerns.
Despite the difficult start of the term as production and other
sectors were affected by the Great East Japan Earthquake, the
Japanese economy started looking up as the restoration of disrupted
supply chains led to recovery in production activity, which in turn
boosted corporate and household mindsets.
Under such circumstances, Toray Group in April 2011 launched the
new medium-term management program "Project AP-G 2013." Under the
project, the Group will strive to strengthen its revenue base by
pursuing business expansion in growth business fields and growth
regions and by bolstering its total cost competitiveness.
As a result, consolidated net sales for the three months ended
June 30, 2011 rose 7.0% compared with the same period of the
previous fiscal year to Yen374.8 billion (US$4,645 million).
Operating income came to Yen27.3 billion (US$338 million), up
68.2%, and ordinary income doubled to Yen29.1 billion (US$360
million). Net income surged 105.5% to Yen17.8 billion (US$220
million).
Business Performance by Segment:
Fibers and Textiles
In Japan, sales increased strongly in overall apparel
applications including inner wear using functional materials and
the sewn products business mainly targeting major specialty store
retailers of private label apparel. However, shipment of
industrial-use materials led by automotive applications was
stagnant due to the impact of the Great East Japan Earthquake.
Overseas, the nylon filament and polyester filament and staple
fiber business in ASEAN countries, the fiber and textile business
in China and ASEAN countries and the yarn and textile business for
air bag applications in Thailand and Czech Republic expanded sales
on the back of strong demand. The Group also made efforts to shift
focus to high value added products and transfer cost increases to
selling prices to reflect steep rises in raw materials and fuel
prices, resulting in steady performance in both apparel and
industrial applications.
As a result, total sales of Fibers and Textiles rose 11.6% to
Yen142.3 billion (US$1,763 million) from the previous year and
operating income jumped 75.3% to Yen10.2 billion (US$126
million).
Plastics and Chemicals
In the Plastics and Chemicals segment, sales volume of
automotive application and other products, mainly in the resin
business, in Japan declined due to the impact of the Great East
Japan Earthquake. However, products in industrial material
applications such as back sheets for solar cells as well as those
for packaging materials performed strongly in the film business.
The Group also made efforts to transfer cost increases due to raw
material price hike to selling prices. Overseas, the polyester film
business and polypropylene film business expanded sales in the
U.S., Europe and Asia.
As a result, total sales of Plastics and Chemicals increased
9.4% year-on-year to Yen103.0 billion (US$1,276 million) and
operating income rose 57.2% to Yen8.6 billion (US$107 million).
IT-related Products
In the IT-related Products segment, shipment of films and
processed film products such as for electronics remained robust.
Materials related to small and mid-sized displays such as for
smartphones performed strongly and sales volume of
semiconductor-related materials also increased.
As a result, sales of the segment increased 1.1% to Yen64.3
billion (US$796 million) compared with the same period a year
earlier, and operating income rose 14.1% to Yen9.5 billion (US$117
million).
Carbon Fiber Composite Materials
In the Carbon Fiber Composite Materials segment, Toray Group has
been actively expanding sales as demand for aircraft as well as in
environmental and energy field including compressed natural gas
tanks expanded and the sports and leisure market around the world
led by golf gear, fishing goods and bicycles continued to recover.
As a result, sales volume increased and factory utilization
recovered. The Group also made steady efforts to push back prices
of primarily general products for sports and general industrial
applications.
On the whole, the Carbon Fiber Composite Materials registered a
year-on-year sales increase of 21.2% to Yen19.0 billion (US$235
million) and posted operating income of Yen2.7 billion (US$34
million), an improvement of Yen2.8 billion.
Environment and Engineering
In the Environment and Engineering segment, though sales of the
water treatment business declined as there was no shipment for
large-scale projects unlike a year earlier, the Group has been
actively seeking orders for various water treatment membranes
including reverse osmosis membrane around the world. The sales
volume of home-use water purifiers increased as consumers attached
a greater importance to safety. Among domestic subsidiaries,
construction work by a water-treatment engineering subsidiary
progressed smoothly, while sales at an engineering subsidiary
remained stagnant mainly because of delays in works due to the
impact of the Great East Japan Earthquake.
As a result, overall sales of the segment declined 12.9% on year
to Yen30.1 billion (US$373 million) and operating loss expanded by
Yen0.6 billion to Yen1.4 billion (US$17 million).
Life Science
In the Life Science segment, the Group pursued sales expansion
of pharmaceutical products including REMITCH(R) , an oral
antipruritus drug, Feron*, a natural-type interferon-<BETA>
preparation, and Dorner*, the orally active prostacyclin
preparation.
Overall sales of segment increased 11.3% on year to Yen13.1
billion (US$163 million) and operating income surged 64.9% to 1.9
billion (US$24 million).
Note: REMITCH(R) is a registered trademark of Torii
Pharmaceutical Co., Ltd.
New Businesses and New Investments
In Fibers and Textiles, Toray Group will start a
high-performance polypropylene spunbond business in Indonesia for
hygiene products such as disposable diapers. The move is in
response to growing demand for the material primarily for baby
diaper application that is rapidly expanding in the country and
other ASEAN countries. The Group plans to establish P.T. Toray
Polytech Jakarta as a subsidiary of Toray Advanced Materials Korea
Inc., and start full-scale operations of the new facilities with
annual production of 20,000 tons in June 2013.
In Plastics and Chemicals, the Group plans to enhance production
capacity of Torelina*PPS (polyphenylene sulfide) resin. The Company
is currently adding production facilities at its Tokai Plant to
increase the material's annual production capacity by 5,000 tons
with a plan to start operations of the additional facilities in
January 2013. PPS resin is superior in heat and chemical
resistance, mechanical strength and flame retardance, and used in
automobile electric components, electrical and electronic
equipment, office automation equipment, and housing parts. The PPS
resin market is expected to grow at an annual rate exceeding
7%.
In IT-related Products, the Group in May this year established
Toray Advanced Film Kaohsiung Co., Ltd. in Kaohsiung, Taiwan, as a
subsidiary of Toray Advanced Film Co., Ltd. The demand for surface
protection films used in luminance improvement films and light
guide plates, materials for LCDs primarily in Asia and the new
company plans to build a plant producing the polyethylene-based
self-adhesive surface protection film Toretec* and start its
operation in January 2013, with a plan to gradually expand its
production capacity to 17,000 tons by following summer.
2. Analysis of Financial Condition
As of June 30, 2011, Toray's total assets stood at Yen1,589.9
billion (US$19,701 million), up Yen22.4 billion from the end of the
previous fiscal year. Current assets rose by Yen18.8 billion
compared to the end of the previous fiscal year, due primarily to
an increase in inventory, while cash and time deposits as well as
notes and accounts receivable - trade decreased. Fixed assets rose
by Yen3.6 billion reflecting primarily the increase in property,
plant and equipment.
Liabilities increased by Yen2.3 billion to Yen928.8 billion
(US$11,509 million) compared to the end of the previous fiscal
year, owing to a rise in interest-bearing debts.
Net assets increased 20.2 billion compared to the end of the
previous fiscal year to Yen661.1 billion (US$8,192 million),
reflecting an increase in retained earnings as the Company recorded
net income and the fluctuation in foreign currency translation
adjustments. Net assets less minority interests came to Yen611.0
billion (US$7,572 million).
3. Forecast of Consolidated Results
While the global economy on the whole is expected to stay on a
gradual recovery track, the outlook remains unpredictable due to
alarming downswing factors including financial instability and
worsening employment condition in the U.S. and Europe and elsewhere
in developed countries as well as risks associated with rising
prices in emerging countries. The Japanese economy is likely to
track a moderate recovery path reflecting production recovery along
with restoration of supply chains disrupted by the Great East Japan
Earthquake and rising exports on the back of the economic expansion
overseas. Still, there also remain risks for domestic economy,
including restrictions in power supply, surge in oil price and the
stronger yen and other fluctuations in foreign exchange. Under such
circumstances, Toray Group has shifted its strategy to an
aggressive one and been implementing the new medium-term management
program "Project AP-G 2013" that pursues business expansion in
growth business fields and growth regions, while continuing with
the reforms promoted by the previous medium-term
management program "Project IT-II." Under "Project AP-G 2013,"
Toray Group shall drive forward the three group-wide projects in an
integrated and aggressive manner: "Green Innovation Business
Expansion (GR) Project" aimed at expanding businesses contributing
to solution of environmental and resource- and energy-related
issues and "Asia and Emerging Country Business Expansion (AE)
Project" for growing businesses in respective regions to take
advantage of remarkable economic growths in emerging countries in
Asia and elsewhere, and the "Total Cost Reduction (TC-II) Project"
to further enhance the corporate competitiveness.
Given the business results for the first quarter and the
progress of measures under "Project AP-G 2013," the Company revised
its first-half and full-year forecasts announced on May 10. The
Company now expects consolidated net sales of Yen800 billion
(US$10,000 million), operating income of Yen60 billion (US$750
million), ordinary income of Yen62 billion (US$775 million), and
net income of Yen39 billion (US$488 million) for the six months
ending September 30, 2011. As for the full year through March 31,
2012, it expects consolidated net sales of Yen1,670 billion
(US$20,875 million), operating income of Yen120 billion (US$1,500
million), ordinary income of Yen120 billion (US$1,500 million), and
net income of Yen74 billion (US$925 million). The Company bases
calculation of its earnings forecasts from July onwards on
assumptions of a foreign currency exchange rate of Yen80 to the
U.S. dollar.
Notes:
1) U.S. dollar amounts have been converted from yen at the
exchange rate of Yen80.7 = U.S.$1, the approximate rate of exchange
prevailing on June 30, 2011.
2) U.S. dollar amounts of forecasts have been converted from yen
at the exchange rate of Yen80 = U.S.$1, the estimated rate of
exchange from July onwards.
3) Product names with (*) abbreviation are trademarks of Toray
Industries, Inc.
Disclaimer
The above stated forecasts are formulated based on estimates of
future economic environment as of the announcement date of this
material and the actual results could differ from the forecasts due
to various factors in the future. The material in this statement is
not a guarantee of the Company's future business performance.
For further information, please contact:
Mr. Kenjiro Kamiyama Mr. Yoshiaki Nakayama
General Manager General Manager
Investor Relations Department Corporate Communications Department
Tel: +81-3-3245-5113 Tel: +81-3-3245-5178
Fax: +81-3-3245-5459 Fax: +81-3-3245-5459
Toray Industries, Inc.
http://www.toray.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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