Nippon kayaku financial_summary_3_q_2012

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Nippon kayaku financial_summary_3_q_2012

  1. 1. Summary of Consolidated Financial Results [Japanese GAAP] for the Third Quarter of the Fiscal Year Ending May 31, 2012 March 27, 2012Listed company: Nippon Kayaku Co., Ltd. (URL http://www.nipponkayaku.co.jp/)Code No.: 4272Listed stock exchange: Tokyo Stock Exchange, First SectionRepresentative: (Position) President, (Name) Akira MandaiPerson in charge of inquiries: (Position) Executive Director, General Manager of Finance & Accounting Division,Financial Group (Name) Masayuki Shimoyama1. Consolidated Business Results for the First Three Quarters of the Fiscal Year Ending May 31, 2012 (June 1, 2011–February 29, 2012) (Figures shown are rounded down to the nearest million yen.)(1) Consolidated Operating Results (Percentages indicate amount of change from the previous year.) First-three-quarter Net sales Operating income Ordinary income net income Millions of Millions of Millions of Millions of % % % % yen yen yen yenFirst threequarters of fiscal 107,712 (3.0) 13,665 (13.9) 13,946 (7.0) 8,106 9.3year ending May31, 2012First threequarters of fiscal 111,020 6.9 15,870 35.7 14,989 29.0 7,417 2.7year ended May31, 2011Note: Comprehensive income First three quarters of fiscal year ending May 31, 2012 7,417 million yen ((7.0)%) First three quarters of fiscal year ended May 31, 2011 6,932 million yen (–%) First-three-quarter First-three-quarter diluted net income per share net income per share Yen YenFirst threequarters of fiscal 44.71 44.67year ending May31, 2012First threequarters of fiscal 40.89 40.89year ended May31, 2011(2) Consolidated Financial Position Total assets Net assets Equity ratio Millions of yen Millions of yen %As of February 202,209 139,484 64.729, 2012As of May 31, 205,110 135,796 62.32011Reference: Equity As of February 29, 2012: 130,914 million yen As of May 31, 2011: 127,752 million yenNote: Equity consists of shareholders’ equity and valuation and translation adjustments. This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan.
  2. 2. 2. Status of Dividends Annual cash dividend per share End of first End of second End of third End of fiscal Total quarter quarter quarter year YenFiscal year ended — 10.00 — 10.00 20.00May 31, 2011Fiscal year ending — 10.00 —May 31, 2012Fiscal year endingMay 31, 2012 10.00 20.00(forecast)Note: Changes to the latest forecast of dividends: None3. Consolidated Business Results Forecast for the Fiscal Year Ending May 2012 (June 1, 2011–May 31, 2012) (Percentages indicate amount of change from the previous year.) Net sales Operating income Ordinary income Net income Net income per share Millions of Millions of % Millions of Millions of Yen % % % yen yen yen yenFull 153,000 2.8 20,500 (1.6) 20,500 1.1 11,000 (15.4) 60.67yearNote: Changes to the latest forecast of consolidated business results: None4. Other(1) Significant changes in subsidiaries during the first three quarters (changes in designated subsidiaries that result in changes in scope of consolidation): None(2) Adoption of special accounting methods for presenting the quarterly consolidated financial statements: None(3) Changes to accounting policies and estimates and retrospective restatement [1] Changes to accounting policies associated with revision of accounting standards or similar items: Yes [2] Changes other than [1]: None [3] Changes to accounting estimates: None [4] Retrospective restatement: None(4) Number of shares issued (common stock) [1] Number of shares issued at end of the fiscal period (including treasury stock) As of February 29, 2012: 182,503,570 shares As of May 31, 2011: 182,503,570 shares [2] Number of treasury stock shares at end of the fiscal period As of February 29, 2012: 1,209,428 shares As of May 31, 2011: 1,182,975 shares [3] Average number of shares during the fiscal period First three quarters of fiscal year ending May 31, 2012: 181,306,502 shares First three quarters of fiscal year ended May 31, 2011: 181,387,614 shares* Information about quarterly review procedure execution:This report of quarterly financial results is outside the scope of the quarterly report review procedures under theFinancial Instruments and Exchange Act in Japan. At the time of the disclosure of this report, the quarterly reportreview procedures under the Financial Instruments and Exchange Act had not been completed.* Explanation related to appropriate use of the business results forecast, and other notesThe business results forecasts and other descriptions related to the future in this report are based on information thatwas obtainable as of the date this report was announced, and on assumptions pertaining to uncertain factors that canaffect future business results. The actual business results may vary greatly due to a variety of future factors. Fordetails on the business results forecast, refer to “Qualitative Information Concerning Forecasts for ConsolidatedBusiness Results” on page 3 of the Supplemental Information. This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan.
  3. 3. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for the Third Quarter of the Fiscal Year Ending May 31, 2012Supplemental InformationTable of Contents1. Qualitative Information Concerning the Third Quarter Results 2 (1) Qualitative Information Concerning the Consolidated Business Results 2 (2) Qualitative Information Concerning the Consolidated Financial Position 3 (3) Qualitative Information Concerning Forecasts for Consolidated Business Results 32. Items Related to Summary Information (Other) 4 (1) Significant changes in subsidiaries during this consolidated fiscal quarter 4 (2) Adoption of special accounting methods for presenting the quarterly consolidated financial 4 statements (3) Changes to accounting policies and estimates and retrospective restatement 4 (4) Additional information 43. Events or Conditions That Indicate There Could Be Substantial Doubt About Going 4 Concern Assumption4. Quarterly Consolidated Financial Statements 5 (1) Quarterly Consolidated Balance Sheets 5 (2) Quarterly Consolidated Profit and Loss Statement and Quarterly Consolidated 7 Comprehensive Income Statement Quarterly Consolidated Profit and Loss Statement 7 Quarterly Consolidated Comprehensive Income Statement 8 (3) Notes Concerning Going Concern Assumption 9 (4) Segment information 9 (5) Notes in case of significant changes in the amount of shareholders’ equity 9 This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―1―
  4. 4. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for the Third Quarter of the Fiscal Year Ending May 31, 20121. Qualitative Information Concerning the Third Quarter Results(1) Qualitative Information Concerning the Consolidated Business Results The global economy during the first three quarters (June 1, 2011–February 29, 2012) of this consolidated fiscal year continues to be uncertain, with an economic slowdown caused by the European financial crisis and slowing growth in China and other emerging nations that had been growing strongly before. In Japan, despite a gradual recovery from the drop in production that was due to the effects of the Great East Japan Earthquake, factors including the effects of flooding in Thailand and the historical high value of the yen continue to produce a harsh business environment. Under these conditions, as prescribed in Phase I (three years) of the mid-term business plan, the Nippon Kayaku Group is working for optimal allocation of business resources into priority business operations and strengthening overseas operations, and has also taken steps to reinforce its profit structure by further reducing costs and restructuring the product lineup. As a result, due to sales in the functional chemicals business and pharmaceuticals business that were both down from the same period in the previous fiscal year, and to related factors, sales for the first three consolidated quarters were 107.712 billion yen, a decrease of 3.308 billion yen (3.0%) from the same period in the previous fiscal year. Due to a decrease in sales and an increase in R&D expenses in the pharmaceuticals business, operating income was 13.665 billion yen, a decrease of 2.205 billion yen (13.9%) from the same period in the previous fiscal year. Although non-operating expenses were down from the same period in the previous fiscal year, ordinary income was 13.946 billion yen, a decrease of 1.043 billion yen (7.0%) from the same period in the previous fiscal year. Net income for the first three quarters was 8.106 billion yen, an increase of 688 million yen (9.3%) from the same period in the previous fiscal year. Performance by business segment is as described below. [Functional chemicals business] In the functional materials business, sales of epoxy resins for semiconductor encapsulation and UV-curing resins were affected by customer production adjustments and continuing sluggish market conditions, and sales were below the level of the same period in the previous fiscal year. Sales for the functional materials business as a whole were down from the same period in the previous fiscal year. In the electronic materials business, although sales of colors for inkjet printers were higher than the same period in the previous fiscal year, sales of resins for optical disks were lower. Sales in the Polatechno Group were down as a result of a slowdown in sales of polarizing films to overseas customers. As a result, sales for the electronic materials business as a whole were down from the level of the same period in the previous fiscal year. In the catalyst business, although sales of catalysts used in the production of acrylic acid were down, there were strong sales of catalysts used in the production of methacrylic acid, and sales for the catalyst business as a whole were higher than the same period in the previous fiscal year. In the color chemicals business, sales were down due to a slowdown in sales of paper dyes. As a result of the above, sales in the functional chemicals business were 49.737 billion yen (a decrease of 6.5% from the same period in the previous fiscal year), and segment profit was 7.743 billion yen (a decrease of 14.3% from the same period in the previous fiscal year). [Pharmaceuticals business] In the area of anti-cancer drugs for the Japanese domestic market, there was large growth in sales of “HYCAMTIN Inj.,” which was approved for additional indications in treating ovarian cancer in February of last year, and sales of the arterial injection “IA CALL,” “PACLITAXEL Inj. NK,” and “BICALUTAMITE Tab. NK,” were also strong and exceeded the levels of the same period in the previous fiscal year. Due to the effects of competitor products and other factors, sales of “RANDA Inj.,” “PINORUBIN Inj.,” and other products were down from the same period in the previous fiscal year. Sales of pharmaceutical products for the Japanese domestic market as a whole were lower than the same period in the previous fiscal year. In the area of exports, sales of “BLEO” (anti-cancer drug) were higher and sales for exports as a whole were higher than the same period in the previous fiscal year. In the area of active pharmaceutical ingredients for the Japanese domestic market, sales of raw materials for drugs were down, and sales of active pharmaceutical ingredients for the Japanese domestic market as a whole were also below the level of the same period in the previous fiscal year. Sales of diagnostic agents were up from the same period in the previous fiscal year. As a result of the above, sales in the pharmaceuticals business were 36.156 billion yen (a decrease of 2.2% from the same period in the previous fiscal year). Segment profit was 6.74 billion yen (a decrease of 12.5% from the same period in the previous fiscal year). This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―2―
  5. 5. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for the Third Quarter of the Fiscal Year Ending May 31, 2012 [Safety systems business] In addition to the Great East Japan Earthquake, the effects of flooding in Thailand produced a harsh market environment in this sector. However growing demand resulting from the full-scale rebound in automobile production that began last autumn resulted in sales of airbag inflators that were higher than the same period in the previous fiscal year. Sales of micro gas generators for seatbelt pretensioners were approximately at the same level as the same period in the previous fiscal year. As a result, sales were 14.959 billion yen (an increase of 7.6% from the same period in the previous fiscal year) and segment profit was 1.772 billion yen (an increase of 76.0% from the same period in the previous fiscal year). [Other] In the agrochemicals business, domestic sales were down from the same period in the previous fiscal year, export sales were up, and sales for the business as a whole were down. Sales in real estate and other business were down from the same period in the previous fiscal year. As a result, sales were 6.858 billion yen (a decrease of 1.1% from the same period in the previous fiscal year) and segment profit was 1.528 billion yen (a decrease of 16.7% from the same period in the previous fiscal year).(2) Qualitative Information Concerning the Consolidated Financial Position Assets, liabilities, and net assets Total assets were 202.209 billion yen, a decrease of 2.9 billion yen from the end of the previous consolidated fiscal year. The primary decreases include a decrease in notes and accounts receivable of 2.496 billion yen and a decrease in marketable securities of 5.905 billion yen. The primary increases were an increase in inventory assets of 2.260 billion yen, and an increase in investment securities of 1.805 billion yen. Liabilities were 62.725 billion yen, a decrease of 6.587 billion yen from the end of the previous consolidated fiscal year. The primary decreases were a decrease in loans payable of 3.398 billion yen, a decrease in notes and accounts payable of 1.010 billion yen, and a decrease in allowance for employee retirement benefits of 1.010 billion yen. The primary increase was an increase in corporation tax payable of 981 million yen. Net assets were 139.484 billion yen, an increase of 3.687 billion yen from the end of the previous consolidated fiscal year. The primary increase was due to a quarterly net income of 8.106 billion yen, while the primary decrease was due to a dividend payment of 3.626 billion yen.(3) Qualitative Information Concerning the Forecasts for the Consolidated Business Results Despite the trend toward recovery from the harsh conditions resulting from the Great East Japan Earthquake, the business environment that will surround the Nippon Kayaku Group in the future is expected to remain uncertain due to adverse effects on domestic businesses resulting from the continued high value of the yen, and to concerns of a slowdown in the global economy caused by financial instability. The Group is working to construct a strong profit structure that is able to adapt to changes in the business environment, and in order to expand profits, we are accelerating our entry into new growth markets through means such as research and development related to materials for environmental and energy-saving purposes, and to biosimilar pharmaceuticals. There is no change to the forecast for the full-year business results that was announced on December 26, 2011. This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―3―
  6. 6. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for the Third Quarter of the Fiscal Year Ending May 31, 20122. Items Related to Summary Information (Other)(1) Significant changes in subsidiaries during this consolidated fiscal quarter None(2) Adoption of special accounting methods for presenting the quarterly consolidated financial statements None(3) Changes to accounting policies and estimates and retrospective restatement (Accounting policy changes) The “Accounting Standards for Net Income Per Share” (ASBJ Statement No. 2, June 30, 2010) and “Guidance on Accounting Standards for Net Income Per Share” (ASBJ Guidance No. 4, June 30, 2010) have been applied beginning from the first quarter of this consolidated fiscal year. When calculating diluted net income per share, we have changed the method for calculating the amount of income from payments received due to the exercise of rights for stock options that an employee can exercise after a certain period of service. With the new method, the portion of the fair value of stock options which is attributable to service yet to be provided to our company is included in this amount of income. This change does not have any effect on the quarterly diluted net income per share.(4) Additional information The “Accounting Standards for Accounting Changes and Correction of Errors” (ASBJ Statement No. 24, December 4, 2009) and “Guidance on Accounting Standards for Accounting Changes and Correction of Errors” (ASBJ Guidance No. 24, December 4, 2009) have been applied to changes in accounting and correction of past errors that are carried out beginning from the start of the first quarter of this consolidated fiscal year.3. Events or Conditions That Indicate There Could Be Substantial Doubt About Going Concern Assumption No items to report This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―4―
  7. 7. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for the Third Quarter of the Fiscal Year Ending May 31, 20124. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets As of May 31, 2011 As of February 29, 2012 Millions of yen Assets Current assets Cash and savings 18,427 18,936 Notes and accounts receivable 46,945 44,449 Marketable securities 22,998 17,092 Merchandise and products 15,515 17,818 Work in process 2,088 1,953 Raw materials and stores 7,043 7,135 Other 10,150 10,388 Allowance for doubtful receivables (36) (46) Total current assets 123,132 117,727 Fixed assets Tangible fixed assets Buildings and structures, net 31,372 32,707 Machinery and transport equipment, net 14,632 15,607 Other, net 14,548 12,692 Total tangible fixed assets 60,553 61,006 Intangible fixed assets Goodwill 1,423 1,735 Other 2,248 2,699 Total intangible fixed assets 3,671 4,435 Investments and other assets Investment securities 13,323 15,128 Other 4,216 3,791 Allowance for doubtful receivables (88) (88) Total investments and other assets 17,451 18,831 Total fixed assets 81,676 84,273 Deferred assets 301 208 Total assets 205,110 202,209 This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―5―
  8. 8. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for the Third Quarter of the Fiscal Year Ending May 31, 2012 As of May 31, 2011 As of February 29, 2012 Millions of yenLiabilities Current liabilities Notes and accounts payable 14,262 13,251 Short-term loans payables 10,917 9,769 Corporation tax payable 1,633 2,614 Other 14,080 12,829 Total current liabilities 40,893 38,464 Fixed liabilities Long-term loans payable 11,143 8,893 Allowance for employee retirement benefits 3,421 2,410 Negative goodwill 490 376 Other 13,364 12,580 Total fixed liabilities 28,419 24,260 Total liabilities 69,313 62,725Net assets Shareholders’ equity Common stock 14,932 14,932 Additional paid-in capital 17,265 17,265 Retained earnings 97,990 102,470 Treasury stock (797) (817) Total shareholders’ equity 129,391 133,850 Accumulated other comprehensive income Net unrealized gains on other securities 131 572 Translation adjustments (1,769) (3,508) Total accumulated other comprehensive income (1,638) (2,935) Minority interests 8,044 8,569 Total net assets 135,796 139,484Total liabilities and net assets 205,110 202,209 This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―6―
  9. 9. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for the Third Quarter of the Fiscal Year Ending May 31, 2012(2) Quarterly Consolidated Profit and Loss Statement and Quarterly Consolidated Comprehensive Income StatementQuarterly Consolidated Profit and Loss Statement First three quarters of First three quarters of fiscal year ended May fiscal year ending May 31, 2011 31, 2012 Millions of yen Net sales 111,020 107,712 Cost of sales 66,065 62,334 Gross profit on sales 44,955 45,377 Selling, general and administrative expenses 29,085 31,712 Operating income 15,870 13,665 Non-operating income Interest income 68 62 Dividend income 289 305 Amortization of negative goodwill 114 114 Equity in earnings of affiliates 188 133 Other miscellaneous income 884 637 Total non-operating income 1,545 1,253 Non-operating expenses Interest expense 270 226 Exchange loss 1,657 368 Other miscellaneous losses 499 377 Total non-operating expenses 2,427 972 Ordinary income 14,989 13,946 Extraordinary income Income on sale of fixed assets 18 39 Gain on sales of subsidiaries and affiliates’ stocks – 1 Total extraordinary income 18 41 Extraordinary loss Fixed asset disposal loss 442 378 Loss on valuation of investment securities 128 12 Environmental expenses – 321 Loss on adjustment for changes of accounting 68 – standard for asset retirement obligations Loss on liquidation of subsidiaries and affiliates 210 – Total extraordinary loss 850 712 First-half net income before income taxes 14,157 13,275 and minority interest Corporation tax, inhabitant tax, and business tax 1,702 4,300 Income taxes deferred 4,395 136 Total income taxes 6,097 4,437 First-three-quarter net income before minority 8,059 8,837 interests in income Minority interests in income 642 731 First-three-quarter net income 7,417 8,106 This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―7―
  10. 10. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for the Third Quarter of the Fiscal Year Ending May 31, 2012Quarterly Consolidated Comprehensive Income Statement First three quarters of First three quarters of fiscal year ended May fiscal year ending May 31, 2011 31, 2012 Millions of yen First-three-quarter income before minority interests 8,059 8,837 Other comprehensive income Unrealized holding gains on other securities 394 440 Translation adjustments (1,521) (1,861) Share of other comprehensive income of associates (0) 0 accounted for using equity method Total other comprehensive income (1,127) (1,420) First-three-quarter comprehensive income 6,932 7,417 First-three-quarter comprehensive income attributable to: Owners of the parent company 6,547 6,808 Minority interests 385 608 This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―8―
  11. 11. Nippon Kayaku Co., Ltd. Summary of Consolidated Financial Results [Japanese GAAP] for the Third Quarter of the Fiscal Year Ending May 31, 2012(3) Notes concerning going concern assumption No items to report(4) Segment information and other items Segment information First three quarters of the previous consolidated fiscal year (June 1, 2010–February 28, 2011) Information on sales and profit (loss) by reportable segment Reportable segments Adjust- Consoli- Others Functional Pharma- Safety Total ments dated (Note 1) chemicals ceuticals systems Total (Note 2) (Note 3) business business business Millions of yen Sales 53,219 36,959 13,906 104,084 6,935 111,020 – 111,020 Sales to third parties Intersegment sales 24 22 – 47 20 68 (68) – and transfers Total 53,244 36,981 13,906 104,132 6,956 111,089 (68) 111,020 Segment profit 9,034 7,706 1,007 17,747 1,835 19,583 (3,712) 15,870 Note 1: “Others” indicates business segments that are not included in the reportable segments, including the agrochemicals business and real estate business. Note 2: The -3,712 million yen adjustment to segment profit includes a 13 million yen elimination of intersegment transactions and -3,726 million yen corporate expense not allocated to the reportable segments. The corporate expense is mainly a general and administrative expense that is not attributed to the reportable segments. Note 3: Adjustments to segment profit are made along with operating income from the quarterly consolidated profit and loss statement. First three quarters of the fiscal year ending May 31, 2012 (June 1, 2011–February 29, 2012) Information on sales and profit (loss) by reportable segment Reportable segments Adjust- Consoli- Others Functional Pharma- Safety Total ments dated (Note 1) chemicals ceuticals systems Total (Note 2) (Note 3) business business business Millions of yen Sales 49,737 36,156 14,959 100,854 6,858 107,712 – 107,712 Sales to third parties Intersegment sales 4 2 – 6 24 31 (31) – and transfers Total 49,742 36,159 14,959 100,860 6,883 107,744 (31) 107,712 Segment profit 7,743 6,740 1,772 16,256 1,528 17,785 (4,119) 13,665 Note 1: “Others” indicates business segments that are not included in the reportable segments, including the agrochemicals business and real estate business. Note 2: The -4,119 million yen adjustment to segment profit includes a 14 million yen elimination of intersegment transactions and -4,134 million yen corporate expense not allocated to the reportable segments. The corporate expense is mainly a general and administrative expense that is not attributed to the reportable segments. Note 3: Adjustments to segment profit are made along with operating income from the quarterly consolidated profit and loss statement.(5) Notes in case of significant changes in the amount of shareholders’ equity No items to report This document is an English translation of parts of the Japanese-language original. All financial information has been prepared in accordance with generally accepted accounting principles in Japan. ―9―

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