TIDMTKK
RNS Number : 9224W
Toray Industries Inc
07 February 2012
February 7, 2012
Toray Announces Consolidated Results
for the Nine Months Ended December 31, 2011
Tokyo, February 7, 2012 - Toray Industries, Inc. (the "Company")
today announced its consolidated business results for the nine
months ended December 31, 2011 of the fiscal 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)
Nine months ended December 31, (Reference)
Fiscal 2010
2011 2010 Change 2011
------------- ------------- ------- -------------
Yen % U.S. dollars Yen
---------------------------- ------- ------------- -------------
Net sales Yen1,199,698 Yen1,126,840 6.5 $15,440 Yen1,539,693
------------- ------------- ------- ------------- -------------
Operating income 89,197 69,966 27.5 1,148 100,087
------------- ------------- ------- ------------- -------------
Ordinary income 91,572 68,667 33.4 1,179 98,888
------------- ------------- ------- ------------- -------------
Net income 53,974 43,779 23.3 695 57,925
------------- ------------- ------- ------------- -------------
Net income per share
- Basic 33.13 27.74 - - 36.41
------------- ------------- ------- ------------- -------------
Net income per share
- Diluted 31.35 26.22 - - 34.43
------------- ------------- ------- ------------- -------------
Consolidated Financial Condition
(Millions of yen, millions of U.S. dollars, except per share
data)
Nine months ended December (Reference)
31, Fiscal 2010
2011 2010 2011
------------- ------------- -------------
Yen U.S. dollars Yen
---------------------------- ------------- -------------
Total assets Yen1,554,847 Yen1,580,940 $20,011 1,567,470
------------- ------------- ------------- -------------
Property, plant and equipment,
net 518,826 535,665 6,677 531,595
------------- ------------- ------------- -------------
Net assets 648,208 633,092 8,342 640,970
------------- ------------- ------------- -------------
Equity ratio 38.7% 37.0% - 37.8%
------------- ------------- ------------- -------------
Notes:
1. For calculation of "equity ratio," minority interests and
subscription rights to shares are deducted from net assets.
2. U.S. dollar amounts have been converted from yen at the
exchange rate of Yen77.7 = U.S.$1, the approximate rate of exchange
prevailing on December 31, 2011.
3. Amounts are rounded to the nearest million.
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 Yen1,610,000 $20,909
------------- -------------
Operating income 110,000 1,429
------------- -------------
Ordinary income 110,000 1,429
------------- -------------
Net income 63,000 818
------------- -------------
Reference: EPS forecast (year ending March 31, 2012)
Yen38.67
Notes:
1. U.S. dollar amounts have been converted from yen at the
exchange rate of Yen77 = U.S.$1, the estimated rate of exchange
from January onwards.
2. Amounts are rounded to the nearest million.
Segment Information
(Millions of yen, millions of U.S. dollars)
Net Sales Nine months ended December 31,
2011 2010 2011
----------- ----------- -------------
Yen U.S. dollars
------------------------ -------------
Fibers and Textiles Yen492,674 Yen441,316 $6,341
----------- ----------- -------------
Plastics and Chemicals 300,082 280,480 3,862
----------- ----------- -------------
IT-related Products 183,847 196,594 2,366
----------- ----------- -------------
Carbon Fiber Composite Materials 53,325 49,527 686
----------- ----------- -------------
Environment and Engineering 118,049 109,712 1,519
----------- ----------- -------------
Life Science 41,976 39,274 540
----------- ----------- -------------
Others 9,745 9,937 125
----------- ----------- -------------
Consolidated Total 1,199,698 1,126,840 15,440
----------- ----------- -------------
(Millions of yen, millions of U.S. dollars)
Segment Income (Loss) Nine months ended December 31,
2011 2010 2011
---------- ---------- -------------
Yen U.S. dollars
---------------------- -------------
Fibers and Textiles Yen38,230 Yen25,507 $492
---------- ---------- -------------
Plastics and Chemicals 22,293 19,767 287
---------- ---------- -------------
IT-related Products 25,033 30,905 322
---------- ---------- -------------
Carbon Fiber Composite Materials 7,630 1,971 98
---------- ---------- -------------
Environment and Engineering 3,925 (2,242) 51
---------- ---------- -------------
Life Science 5,240 5,328 67
---------- ---------- -------------
Others 738 700 9
---------- ---------- -------------
Total 103,089 81,936 1,327
---------- ---------- -------------
Adjustment (13,892) (11,970) (179)
---------- ---------- -------------
Consolidated Total
(Operating income) 89,197 69,966 1,148
---------- ---------- -------------
Notes:
1. "Others" represents service-related businesses such as analysis, survey and research.
2. "Adjustment" of segment income for the nine months ended
December 31, 2011 of (13,892) million yen includes intersegment
eliminations of 76 million yen and corporate expenses of (13,968)
million yen. "Adjustment" of segment income (loss) for the nine
months ended December 31, 2010 of (11,970) million yen includes
intersegment eliminations of 947 million yen and corporate expenses
of (12,917) 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 Yen77.7 = U.S.$1, the approximate rate of exchange
prevailing on December 31, 2011.
4. Amounts are rounded to the nearest million.
Consolidated Business Results and Financial Condition
1. Overview of the Nine Months Ended December 31, 2011
During the nine months under review, though the global economy
on the whole continued to expand steadily in the first half,
uncertainties stemming from the financial crisis in Europe grew
greater since summer, fueling concerns of economic slowdown even in
China and other emerging countries. Also, the large-scale floods in
Thailand had a severe impact on the overall supply chains of
products such as automobiles and digital equipment on a global
level. The Japanese economy, in spite of signs of recovery
following the easing of supply constraints caused by the Great East
Japan Earthquake, is facing increased uncertainties over the future
due to the fluctuations in the global economy as well as the
accelerated appreciation of the yen.
Under such circumstances, Toray Group in April 2011 launched the
new medium-term management program "Project AP-G 2013." Under the
project, the Group has been striving to strengthen its revenue base
by pursuing business expansion in growth business fields and growth
regions and by bolstering its total cost competitiveness.
Reflecting these efforts, consolidated net sales for the
nine-month period rose 6.5% compared with the same period a year
ago to Yen1,199.7 billion (US$15,440 million). Operating income
increased 27.5% to Yen89.2 billion (US$1,148 million) and ordinary
income rose 33.4% to Yen91.6 billion (US$1,179 million). Net income
increased 23.3% to Yen54.0 billion (US$695 million).
Business performance by segment is described below.
Business Performance by Segment:
Fibers and Textiles
In Japan, sales increased strongly in apparel applications
including inner wear using functional materials. Sales of
industrial-use materials, especially automotive applications, also
recovered along with retrieval of automobile manufacturers'
operations. Overseas, the polyester filament and staple fiber
business in ASEAN countries, the clothing textile business in China
and ASEAN countries, the polypropylene spunbond business for
diapers in Republic of Korea and China and the textile business for
air bag applications in Thailand and Czech Republic expanded sales
and shifted focus to high value-added products. This resulted in
steady performance in both apparel and industrial applications
abroad.
Overall sales of Fibers and Textiles rose 11.6% to Yen492.7
billion (US$6,341 million) from the same period a year earlier and
operating income expanded 49.9% to Yen38.2 billion (US$492
million).
Plastics and Chemicals
In the Plastics and Chemicals segment, sales volume of
automotive application and other products in the resin business,
which had been affected by the Great East Japan Earthquake,
recovered from the second quarter mainly in Japan. At the same
time, demand for general purpose ABS stagnated overseas against the
backdrop of global economic slowdown. In the film business,
products in industrial material applications and packaging
materials performed strongly in Japan and Toray Group expanded
sales in the U.S., Europe and Asia in the second quarter. In the
third quarter, however, the demand for these products waned both in
Japan and abroad because of the global economic slowdown and
price-cutting competition intensified.
On the whole, the total sales for Plastics and Chemicals rose
7.0% year-on-year to Yen300.1 billion (US$3,862 million). Operating
income increased 12.8% to Yen22.3 billion (US$287 million).
IT-related Products
In the IT-related Products segment, while sales of materials for
small and mid-sized displays such as for smartphones as well as
semiconductor-related materialsperformed strongly, those of LCD and
PDP TV related products including films and processed film products
fell due to the impact of panel production adjustments caused by
the slowdown in the flat-screen TV market.
Sales of IT-related Products declined 6.5% to Yen183.8 billion
(US$2,366 million) and operating income fell 19.0% to Yen25.0
billion (US$322 million).
Carbon Fiber Composite Materials
In the Carbon Fiber Composite Materials segment, despite the
impact of the strong yen, Toray Group actively pursued sales
expansion in the aerospace and general industrial applications, as
demand for aircraft applications grew and that in environmental and
energy field including compressed natural gas tanks expanded. In
the first half, the Group also made steady efforts to push back
prices primarily in the area of general products for sports and
general industrial applications. Demand for the sports application
products, however, weakened due to the impact of economic slowdown
in the U.S. and Europe since early fall.
Overall sales of the Carbon Fiber Composite Materials segment
rose 7.7% on year to Yen53.3 billion (US$686 million) while
operating income surged 287.1% to Yen7.6 billion (US$98
million).
Environment and Engineering
In the Environment and Engineering segment, sales of the water
treatment business declined due to lack of large-scale projects
similar to those during the same period a year earlier and also
because of the stronger yen. Nevertheless, the Company actively
pursued activities to win orders for reverse osmosis membranes and
other water treatment membranes around the world. In Japan, large
projects at a water treatment engineering subsidiary made progress,
while sales at construction and real estate subsidiaries
expanded.
The total sales of Environment and Engineering increased 7.6% to
Yen118.0 billion (US$1,519 million). The segment posted operating
income of Yen3.9 billion (US$51 million), an improvement of Yen6.2
billion from the same period a year earlier.
Life Science
In the Life Science segment, sales of pharmaceutical products
including REMITCH(R) , an oral antipruritus drug for hemodialysis
patients, as well as those of TORAYMYXIN(TM) , a hemoperfusion
absorption column for removing endotoxin, and TORAYLIGHT(TM) , a
polysulfone membrane artificial kidney, increased.
Overall sales of Life Science rose 6.9% to Yen42.0 billion
(US$540 million) from the same period a year earlier, while
operating income fell 1.7% to Yen5.2 million (US$67 million),
partly due to an increased burden of development expenses.
Note: REMITCH(R) is a registered trademark of Torii
Pharmaceutical Co., Ltd.
New Businesses and New Investments
The Company separated the Shanghai Office (established in 2004)
of Toray Fibers & Textiles Research Laboratories (China) Co.,
Ltd., established in 2002 in Nantong, Jiangsu, to make it an
independent entity. The move is aimed at strengthening research and
development required for expanding the business in China, and the
new entity following the division, Toray Advanced Materials
Research Laboratories (China) Co., Ltd., began operations in
January 2012. It is expected to embark on development of products
and provision of technological services including film processing,
carbon fiber composite materials and electronic information
materials, while reinforcing existing research on resin, films,
water treatment and amenity. At the same time, it plans to have
Toray Fibers & Textiles Research Laboratories (China)
specialize in fiber- and textile-related research and development
and further enhance its operation.
In October 2011, the Company, with the cooperation of Chubu
Electric Power Co., Inc., reached a basic agreement with Mitsui
Chemicals, Inc., Mitsui & Co., Ltd., Toagosei Co., Ltd.,
Toshiba Corporation, Mitsui Engineering and Shipbuilding Co., Ltd.,
companies which have expertise and track records in renewable
energy, to conduct a feasibility study for building Japan's biggest
solar and wind power generation facility in Tahara City, Aichi
Prefecture.
Toray Group has been producing various products related to
renewable energy such as LUMIRROR(R) PET film used as back sheet in
solar cells and carbon fiber TORAYCA(R) used in wind mill blades,
while promoting development of other related materials, devices and
systems. Driving forward this business would help in identifying
the fundamental technical issues facing renewable energy and the
Group will further accelerate the developments toward solving those
issues.
2. Analysis of Financial Condition
As of December 31, 2011, Toray Group's total assets stood at
Yen1,554.8 billion (US$20,011 million), down Yen12.6 billion
compared with the end of the previous fiscal year. Current assets
increased Yen12.4 billion from the end of the previous fiscal year
primarily due to higher levels of inventories despite decline in
cash and cash equivalents. Fixed assets fell by Yen25.1 billion
reflecting decreases in property, plant and equipment and
investment securities.
Total liabilities fell by Yen19.9 billion to Yen906.6 billion
(US$11,668 million) compared to the end of the previous fiscal
year, owing to declines in notes and accounts payable.
Net assets increased Yen7.2 billion compared with the end of the
previous fiscal year to Yen648.2 billion (US$8,342 million). This
reflected increased retained earnings from net income. Net assets
less minority interests and subscription rights to shares stood at
Yen601.1 billion (US$7,736 million).
3. Forecast of Consolidated Results
Going forward, though reconstruction demand is expected in Japan
following the Great East Japan Earthquake, there are increasing
concerns regarding the overseas outlook as the worsening European
sovereign debt problems and financial uncertainties could bring
about downward pressures on not only the European economy but also
the global economy.
Under such circumstances, Toray Group has been implementing the
new medium-term management program "Project AP-G 2013" that pursues
business expansion in growth business fields and growth regions.
Under the project, Toray Group is driving 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, "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, ultimately to promote growth strategy and
strengthen its earnings base.
Given the increasingly uncertain economic situations both in
Japan and abroad as well as its business results through the nine
months of the fiscal year, the Company revised the earnings
forecasts for the fiscal year through March 31, 2012. It now
expects consolidated net sales of Yen1,610 billion (US$20,909
million), operating income of Yen110 billion (US$1,429 million),
ordinary income of Yen110 billion (US$1,429 million), and net
income of Yen63 billion (US$818 million). The Company based its
revised earnings forecasts on an estimated exchange rate of Yen77
to US$1 for the period starting January 1, 2012.
Notes:
1. U.S. dollar amounts have been converted from yen at the
exchange rate of Yen77.7 = U.S.$1, the approximate rate of exchange
prevailing on December 31, 2011.
2. U.S. dollar amounts of forecasts have been converted from yen
at the exchange rate of Yen77 = U.S.$1, the estimated rate of
exchange from January onwards.
4. Subsequent events
1. Impact of Thai Floods
Some of the Company's consolidated subsidiaries were inundated
by the large-scale floods in Thailand which occurred in October
2011. Subsequently, the plants have been resuming their operations
one by one as and when they finish draining the water and complete
the restoration work. The level of damage is yet to be fully
assessed as of the publication of this report, and it is difficult
to give a rational estimate of the overall impact on the business
performance. The Company plans to file an insurance claim for the
affected assets.
2. Making Toray Tonen Specialty Separator Godo Kaisha a
Subsidiary
The Company made a decision to make Toray Tonen Specialty
Separator Godo Kaisha, a 50-50 joint venture with Tonen Chemical
Corporation and Tonen Chemical Nasu Corporation (both are
subsidiaries of Tonen General Sekiyu K.K. of ExxonMobil Group), the
Company's 100% owned subsidiary through redemption of the interest
held by ExxonMobil Group at its meeting of the Board of Directors
held on January 20, 2012. On following January 31, Toray Tonen
Specialty Separator Godo Kaisha refunded the interest held by
ExxonMobil Group.
(i) Name and business of the acquired company
Name: Toray Tonen Specialty Separator Godo Kaisha
Business: Production, processing and sale of synthetic resin
films
(ii) Objective of the acquisition
It is necessary for Toray Tonen Specialty Separator to speed up
its response even further upon operating the business to survive in
the drastically changing market environment. The Company would
manage Toray Tonen Specialty Separator as a wholly owned subsidiary
to further improve its corporate value.
(iii) Acquisition date
January 31, 2012
(iv) Company name after the acquisition
Toray Battery Separator Film Godo Kaisha
(v) Acquisition cost and the stake after the acquisition
Acquisition cost: 53,555 million yen
Stake after the acquisition: 100
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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