TIDMTKK
RNS Number : 4267S
Toray Industries Inc
07 November 2013
November 7, 2013
Toray Announces Consolidated Results
for the Six Months Ended September 30, 2013
Tokyo, November 7, 2013 - Toray Industries, Inc. ("Toray") today
announced its consolidated business results for the six months
ended September 30, 2013 of the fiscal year ending March 31, 2014.
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)
Six months ended September 30, (Reference)
Fiscal 2012
---------------------- ------------------------------------------------ -------------
2013 2012 Change 2013
---------------------- ----------- ----------- ------- ------------- -------------
Yen % U.S. dollars Yen
---------------------- ------------------------ ------- ------------- -------------
Net sales Yen853,757 Yen753,729 13.3 $8,730 Yen1,592,279
---------------------- ----------- ----------- ------- ------------- -------------
Operating income 44,296 36,692 20.7 453 83,436
---------------------- ----------- ----------- ------- ------------- -------------
Ordinary income 46,527 38,040 22.3 476 88,244
---------------------- ----------- ----------- ------- ------------- -------------
Net income 29,372 20,006 46.8 300 48,477
---------------------- ----------- ----------- ------- ------------- -------------
Net income per share
- Basic 18.03 12.28 - - 29.75
---------------------- ----------- ----------- ------- ------------- -------------
Net income per share
- Diluted 17.51 11.93 - - 28.90
---------------------- ----------- ----------- ------- ------------- -------------
Consolidated Financial Condition
(Millions of yen, millions of U.S. dollars, except per share
data)
As of September 30, As of March 31, 2013
2013
-------------- ---------------------------- ---------------------
Yen U.S. dollars Yen
-------------- ------------- ------------- ---------------------
Total assets Yen1,876,700 $19,189 Yen1,731,933
-------------- ------------- ------------- ---------------------
Net assets 858,483 8,778 778,626
-------------- ------------- ------------- ---------------------
Equity ratio 42.5% - 41.8%
-------------- ------------- ------------- ---------------------
Cash Dividends
(Yen)
Cash dividends per share
------------------- -----------------------------------------
1Q 2Q 3Q 4Q Annual
------------------- --- -------- --- --------- ----------
FY2012 - Yen5.00 - Yen 5.00 Yen10.00
------------------- --- -------- --- --------- ----------
FY2013 - 5.00
------------------- --- -------- --- --------- ----------
FY2013 (forecast) - 5.00 10.00
------------------- --- -------- --- --------- ----------
Notes:
1. For calculation of "Equity ratio," minority interests and
stock acquisition rights are deducted from net assets.
2. U.S. dollar amounts have been converted from yen at the
exchange rate of Yen97.8 = U.S.$1, the approximate rate of exchange
prevailing on September 30, 2013.
3. Amounts are rounded to the nearest million.
4. Consolidated financial conditions as of March 31, 2013 are
adjusted retrospectively by changes in accounting policies due to
applying revised IAS 19.
Segment Information
(Millions of yen, millions of U.S. dollars)
Net Sales Six months ended September 30,
--------------------------- ----------------------------------------
2013 2012 2013
--------------------------- ----------- ------------ -------------
Yen U.S. dollars
--------------------------- ------------------------- -------------
Fibers & Textiles Yen335,069 Yen288,852 $3,426
--------------------------- ----------- ------------ -------------
Plastics & Chemicals 228,011 194,965 2,331
--------------------------- ----------- ------------ -------------
IT-related Products 121,963 121,120 1,247
--------------------------- ----------- ------------ -------------
Carbon Fiber Composite
Materials 52,088 36,544 533
--------------------------- ----------- ------------ -------------
Environment & Engineering 83,096 78,147 850
--------------------------- ----------- ------------ -------------
Life Science 26,632 27,018 272
--------------------------- ----------- ------------ -------------
Others 6,898 7,083 71
--------------------------- ----------- ------------ -------------
Consolidated Total 853,757 753,729 8,730
--------------------------- ----------- ------------ -------------
Segment Income (Loss) Six months ended September 30,
--------------------------- -------------------------------------
2013 2012 2013
--------------------------- ---------- ---------- -------------
Yen U.S. dollars
--------------------------- ---------------------- -------------
Fibers & Textiles Yen24,174 Yen18,537 $247
--------------------------- ---------- ---------- -------------
Plastics & Chemicals 9,014 10,521 92
--------------------------- ---------- ---------- -------------
IT-related Products 10,836 9,645 111
--------------------------- ---------- ---------- -------------
Carbon Fiber Composite
Materials 7,080 4,188 72
--------------------------- ---------- ---------- -------------
Environment & Engineering 644 (38) 7
--------------------------- ---------- ---------- -------------
Life Science 1,859 3,005 19
--------------------------- ---------- ---------- -------------
Others 696 650 7
--------------------------- ---------- ---------- -------------
Total 54,303 46,508 555
--------------------------- ---------- ---------- -------------
Adjustment (10,007) (9,816) (102)
--------------------------- ---------- ---------- -------------
Consolidated Total
(Operating income) 44,296 36,692 453
--------------------------- ---------- ---------- -------------
Notes:
1. "Others" represents service-related businesses such as analysis, survey and research.
2. "Adjustment" of segment income (loss) for the six months
ended September 30, 2013 of (10,007) million yen includes
intersegment eliminations of (65) million yen and corporate
expenses of (9,942) million yen. "Adjustment" of segment income
(loss) for the six months ended September 30, 2012 of (9,816)
million yen includes intersegment eliminations of 168 million yen
and corporate expenses of (9,984) 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 Yen97.8 = U.S.$1, the approximate rate of exchange
prevailing on September 30, 2013.
4. Amounts are rounded to the nearest million.
Forecast of Consolidated Results for the fiscal year ending
March 31, 2014
(Millions of yen, millions of U.S. dollars)
Year ending March 31,
2014
------------------ ----------------------------
Yen U.S. dollars
------------------ ------------- -------------
Net sales Yen1,850,000 $19,474
------------------ ------------- -------------
Operating income 120,000 1,263
------------------ ------------- -------------
Ordinary income 120,000 1,263
------------------ ------------- -------------
Net income 65,000 684
------------------ ------------- -------------
Reference: EPS forecast (year ending March 31, 2014)
Yen39.90
Notes:
1. U.S. dollar amounts have been converted from yen at the
exchange rate of Yen95 = U.S.$1, the estimated rate of exchange
from October onwards.
2. Amounts are rounded to the nearest million.
Consolidated Business Results and Financial Condition
1. Overview of the Six Months Ended September 30, 2013
During the six months under review, the global economy continued
to expand gradually, as consumer spending in the U.S. grew on the
back of improved employment, despite the European economy
continuing to stagnate after bottoming out and China and other
emerging economies slowing down. The Japanese economy has been
recovering at a gradual pace with consumer spending increasing and
capital expenditure and exports also showing signs of recovery.
Under such circumstances, Toray Group has been implementing the
growth strategy with focus on pursuing business expansion in growth
business fields and growth regions and further bolstering its total
cost competitiveness in accordance with the medium-term management
program "Project AP-G 2013."
As a result, consolidated net sales for the six months ended
September 30, 2013 increased 13.3% compared with the same period of
the previous fiscal year to Yen853.8 billion (US$8,730 million).
Operating income came to Yen44.3 billion (US$453 million), up
20.7%, and ordinary income rose 22.3% to Yen46.5 billion (US$476
million). Net income increased by 46.8% to Yen29.4 billion (US$300
million).
Business performance by segment is described below.
Business Performance by Segment:
Fibers & Textiles
In Japan, while sales of functional materials for fall and
winter wear grew strongly, sales of general apparel applications,
though showing signs of recovery, remained weak. On the other hand,
exports recovered partly under the influence of the correction of
the strong yen. Sales for industrial applications, despite demand
for automobile-related applications bottoming out, failed to
recover to the levels of the same period of the previous fiscal
year when subsidies for purchase of eco-cars had boosted
demand.
Overseas, while the conditions continued to be tough with Europe
remaining mired in economic slump and sluggish domestic demand in
China, textile subsidiaries in Southeast Asia and China pursued
sales expansion and a shift towards high value-added products.
Also, while the floods in Thailand in October 2011 had affected the
operations in the same period a year earlier, the production and
sales recovered since then, contributing to the improved
performance.
As a result, overall sales of Fibers & Textiles segment
increased 16.0% to Yen335.1 billion (US$3,426 million) compared
with the same period a year earlier, and operating income increased
30.4% to Yen24.2 billion (US$247 million).
Plastics & Chemicals
In the Plastics & Chemicals segment, though demand for
automotive applications in the resin business increased in Japan,
it was affected by the increased raw material prices resulting from
the correction of the strong yen. Overseas, sales targeting North
American automobile applications and Southeast Asia expanded.
Demand for the film business's products remained sluggish on the
whole within and outside Japan, with continued price competition,
even though domestic sales for capacitors used in hybrid cars
remained strong.
Also, trading subsidiaries expanded their business transactions
on the back of market recovery and strong overseas business.
As a result, overall sales of Plastics & Chemicals segment
increased 16.9% to Yen228.0 billion (US$2,331 million) compared
with the same period a year earlier, and operating income fell
14.3% to Yen9.0 billion (US$92 million).
IT-related Products
In the IT-related Products segment, shipment of films and
processed film products for large LCD panels used in flat-screen
TVs entered a correction phase with demand for TV stagnating, while
sales for small and mid-sized displays such as smartphones and
tablet terminals grew strongly. Overseas, subsidiaries making films
and processed film products as well as electronic circuit materials
in Republic of Korea performed strongly. In general, price
competition in the field continued partly due to the impact of
price declines of final products. Also, equipment sales at a
Japanese subsidiary declined compared with the same period a year
earlier.
As a result, overall sales of IT-related Products segment
increased 0.7% to Yen122.0 billion (US$1,247 million) compared with
the same period a year earlier, and operating income rose 12.3% to
Yen10.8 billion (US$111 million).
Carbon Fiber Composite Materials
In the Carbon Fiber Composite Materials segment, as demand for
aircraft as well as that in the environment and energy fields
including compressed natural gas tank applications expanded, sales
of carbon fibers and intermediate product (prepreg) grew strongly
for aerospace applications and general industrial applications. In
the composite business, sales of carbon fiber reinforced plastic
chassis for notebook PCs, which boasts high strength and light
weight, expanded.
As a result, overall sales of Carbon Fiber Composite Materials
segment increased 42.5% to Yen52.1 billion (US$533 million)
compared with the same period a year earlier, and operating income
rose 69.1% to Yen7.1 billion (US$72 million).
Environment & Engineering
In the Environment & Engineering segment, while the market
for water treatment membranes has not yet fully recovered
reflecting continued uncertainties over the global economic
outlook, shipment of reverse osmosis membranes to the Middle East
was strong at Toray. Among domestic subsidiaries, profitability at
the construction and real estate subsidiary declined, and the plant
construction projects declined at the engineering subsidiary.
As a result, overall sales of Environment & Engineering
segment increased 6.3% to Yen83.1 billion (US$850 million), and
operating income reached at Yen0.6 billion yen (US$7 million),
which is a Yen0.7 billion improvement from the same period a year
earlier.
Life Science
In the Life Science segment, sales of REMITCH(R) *, an oral
anti-pruritus drug for hemodialysis patients, expanded, while other
pharmaceutical products were affected by intensifying competition.
License revenue also decreased. Sales in Japan as well as exports
of medical products including TORAYSULFONE(R) and TORAYLIGHT(TM) ,
polysulfone membrane artificial kidneys, increased strongly, while
sales of dialysis equipment remained slow.
As a result, overall sales of Life Science segment fell 1.4% to
Yen26.6 billion (US$272 million) compared with same period a year
earlier, and operating income declined 38.1% to Yen1.9 billion
(US$19 million).
* REMITCH(R) is a registered trademark of Torii Pharmaceutical
Co., Ltd.
New Businesses and New Investments
Under "Project AP-G 2013," Toray Group has been implementing a
growth strategy with emphasis on "business expansion in growth
business fields and growth regions."
In the Carbon Fiber Composite Materials business, Toray decided
to expand the production facility for prepreg (resin-impregnated
carbon fiber sheet) using the carbon fiber TORAYCA(R) at its
Ishikawa Plant. Toray plans to introduce state-of-the-art facility
for producing high value-added prepreg and it is expected to start
production in February 2015. This expansion not only enables Toray
to address the growing demand for high value-added prepreg used in
chassis for IT devices and in automobile exteriors but also gives
it flexibility in production to respond to future demand trend with
the specifications that allow the facility to manufacture products
for Boeing 787 aircraft.
In addition, Toray agreed with U.S. large tow carbon fiber
manufacturer Zoltek Companies, Inc. ("Zoltek") to acquire the
entire stake in it. The use of large tow carbon fibers, produced on
modified acrylic staple fiber production line for textiles, is
expected to expand in applications including wind energy-related,
which has been showing rapid demand growth in recent years, and
automobile structural parts in the future. Zoltek is the biggest
manufacturer of large tow carbon fibers and has been significantly
expanding the business, as the material's wind energy-related
application grew. Toray until now has focused its business
resources on high-performance, high-quality regular tow carbon
fibers and has been performing strongly in advanced fields such as
aircraft and compressed natural gas tank. The purchase of the
entire stake in Zoltek enables Toray to expand into the highly
versatile industrial field with large tow carbon fibers, giving it
an opportunity for further growth.
2. Analysis of Financial Condition
As of September 30, 2013, Toray Group's total assets stood at
Yen1,876.7 billion (US$19,189 million), up Yen144.8 billion from
the end of the previous fiscal year primarily due to increases in
inventory and fixed assets.
Liabilities increased by Yen64.9 billion to Yen1,018.2 billion
(US$10,411 million) compared to the end of the previous fiscal
year, owing mainly to an increase in interest-bearing debts.
Net assets increased Yen79.9 billion compared with the end of
the previous fiscal year to Yen858.5 billion (US$8,778 million),
reflecting an increase in retained earnings as Toray Group recorded
net income and fluctuations in foreign currency translation
adjustment. Net assets less minority interests and stock
acquisition rights came to Yen797.7 billion (US$8,157 million).
3. Forecast of Consolidated Results
While there remain uncertainties over the European economy and
concerns regarding U.S. fiscal negotiations that are making little
headway and the risk of a downward swing of the Chinese economy,
the global economy as a whole is expected to register a gradual
recovery reflecting continued steadiness of the U.S. economy and
recovery in the European and emerging economies. The growth rate of
the Japanese economy is expected to increase towards the second
half of the fiscal year on the effect of economic policies,
last-minute demand before the consumption tax hike and the
improvement in export environment, though concerns remain that a
potential downswing in overseas economies could lead to an economic
slowdown.
Under such circumstances, Toray Group will continue to focus on
measures under the medium-term management program "Project AP-G
2013" and strive to drive forward the growth strategy and
strengthen its revenue base.
Toray has kept its full-year earnings forecasts announced on
August 6 unchanged. The calculation of Toray Group's earnings
forecasts from October 2013 onwards is based on an assumed foreign
currency exchange rate of Yen95 to the U.S. dollar.
Notes:
U.S. dollar amounts have been converted from yen at the exchange
rate of Yen97.8 = U.S.$1, the approximate rate of exchange
prevailing on September 30, 2013.
Disclaimer
Descriptions of predicted business results, forecasts and
business plans contained in this material are based on predictive
forecasts of the future business environment made at the present
time. The material in this statement is not a guarantee of Toray'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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