Summary of FY2005 First Quarter Consolidated Financial Results and Business Performance
Name of listed company: URL http://www.zeon.co.jp/ |
ZEON Corporation | (Code: 4205: First Section, Tokyo Stock Exchange and Osaka Securities Exchange) |
| Representative | President & CEO | Naozumi Furukawa | |
| Contact | Director and General Manager, Finance & Accounting Dept. |
Tadayuki Minami | Tel: +81-3-3216-1412 |
| 1. | Notes Regarding the Compilation of Quarterly Results |
| (1) | Adoption of simplified method of accounting: Applicable Content: Method of depreciation and amortization, calculation standards for corporate taxes, etc. |
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| (2) | Change in accounting method in current consolidated fiscal year (fiscal 2005): Applicable Effecttive April 1, 2005, accounting standards for impairment of fixed assets has been applied to the Company and the domestic consolidated subsidiaries. |
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| (3) | Change in scope of consolidation or application of equity method for subsidiaries: Not applicable |
| 2. | Summary of Financial Results for FY2005 First Quarter (April 1, 2005 to June 30, 2005) |
(1) Status Report on Consolidated Management Results
(Rounded to the nearest million yen)
| Net Sales | Operating Income | Ordinary Income | (Quarterly) Net Income |
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| FY2005 Q1 | ¥ (million) 62,404 |
Change (%) 14.2 |
¥ (million) 5,354 |
Change (%) 22.2 |
¥ (million) 5,754 |
Change (%) 22.4 |
¥ (million) 2,660 |
Change (%) 16.3 |
| FY2004 Q1 | 54,639 | 2.7 | 4,382 | — | 4,699 | — | 2,287 | — |
| (Reference) FY2004 |
231,364 | 8.5 | 19,304 | 7.9 | 18,804 | 37.1 | 7,773 | 69.4 |
| (Quarterly) Net Income Per Share | Fully Diluted (Quarterly) Net Income Per Share | |
| FY2005 Q1 | Yen 11.08 |
Yen — |
| FY2004 Q1 | Yen 9.47 |
Yen — |
| (Reference) FY2004 |
Yen 32.01 |
Yen — |
| Notes: | ||
| 1. | Percentage for net sales and operating income shows year-over-year changes from the corresponding previous period. | |
| 2. | With regard to items other than net sales, percentage changes in FY2004 first quarter from the same quarter in the previous fiscal year have not been provided because the Company began disclosing the relevant figures from the first quarter of FY2004. |
Qualitative Information Related to Status Report on Consolidated Management Results
The impact of rising prices for crude oil and naphtha, which subsequently stabilized at a high level, continued in the first quarter of FY2005. In response to the increased cost of raw materials, the Company continued to thoroughly reduce costs through the Z∑ (Sigma) Activities. It also endeavored to adjust sales prices to restore profitability, mainly in the Elastomer segment, from the middle of FY2004. The Specialty High Performance Materials segment has continued to develop and expand the sales of new products.
The results show increases in both revenues and profit for the first quarter of FY2005, with net sales increasing by ¥7,764 million to ¥62,404 million, up 14.2% from the same quarter of the previous fiscal year. Operating income increased by ¥972 million to ¥5,354 million, up 22.2% from the same quarter of the previous fiscal year; ordinary income increased by ¥1,055 million to ¥5,754 million, up 22.4%; and net income rose by ¥373 million to ¥2,660 million, up 16.3%.
The results show increases in both revenues and profit for the first quarter of FY2005, with net sales increasing by ¥7,764 million to ¥62,404 million, up 14.2% from the same quarter of the previous fiscal year. Operating income increased by ¥972 million to ¥5,354 million, up 22.2% from the same quarter of the previous fiscal year; ordinary income increased by ¥1,055 million to ¥5,754 million, up 22.4%; and net income rose by ¥373 million to ¥2,660 million, up 16.3%.
In the Elastomer segment, we continued drastic cost reduction efforts through Z∑ (Sigma) Activities. However, in response to the significant influence of the rise and subsequent stabilization of raw materials prices at a high level, we continued efforts to adjust sales prices to restore profitability. As a result, sales increased by ¥2,574 million to ¥36,097 million, up 7.7% from the same quarter of the previous fiscal year, and operating income rose by ¥953 million to ¥2,994 million, up 46.7%.
In the Specialty High Performance Materials segment, sales of ZeonorFilm® for LCD panels in specialty plastics, including cyclo-olefin polymer, grew significantly. In addition, sales of ZEONEX® resin for optical lenses and medical uses also demonstrated stable growth. In information materials, steady growth in the sales of ZEORORA ZFL-58 etching gas boosted operating income over the comparable figure for the same quarter of the previous fiscal year. Net sales, however, decreased due to changes in the accounting method for reporting sales. In specialty chemicals, both net sales and operating income decreased from the same quarter in the previous fiscal year due to the fact that client companies began developing their own chemicals for fragrances. As a result, net sales increased by ¥150 million to ¥8,973 million, up 1.7% from the same quarter of the previous fiscal year, and operating income decreased by ¥66 million to ¥2,143 million, down 3.0%.
In the Others segment, results for the environment and health businesses were nearly identical to the same quarter of the previous fiscal year. Sales at the trading division of a subsidiary, however, increased significantly. As a result, net sales increased by ¥5,099 million to ¥17,482 million, up 41.2% from the same quarter of the previous year, and operating income rose ¥81 million to ¥222 million, up 57.4%.
In accordance with the decision at the meeting of the Company’s Board of Directors held May 18, 2005, ZEON Chemicals Inc., a ZEON Corporation subsidiary in the United States, sold its shares of the subsidiary ZEON Biomune Inc.
| (1) | Sale of Shares |
| Shares to be sold: 1,000 (100% of holdings) Date of agreement: June 10, 2005 | |
| (2) | Acquiring Company |
| CEVA SANTE ANIMALE S.A. | |
| (3) | Reason for the Sale |
| To allow ZEON CHEMICALS INC. to focus its management resources on the mainstay synthetic rubber business and to build a solid financial capability by selling the animal vaccine business as a non-staple business. | |
| (4) | Influence on Business Results |
| As a result of the sale of the subsidiary’s stock, extraordinary income of approximately ¥2 billion is expected to be reported in the financial statement for the first half of the fiscal year ending March 2006. |
(2) Changes in Consolidated Financial Condition
| Total Assets | Total Shareholders’ Equity | Equity Ratio | Shareholders’ Equity Per Share | |
| FY2005 Q1 | ¥ (million) 240,827 |
¥ (million) 78,897 |
% 32.8 |
Yen 328.68 |
| FY2004 Q1 | 227,861 | 73,496 | 32.3 | 304.90 |
| (Reference) FY2004 |
236,861 | 76,357 | 32.3 | 317.86 |
Qualitative Information Related to Changes in Consolidated Financial Condition
Total assets as of the end of the first quarter of FY2005 amounted to ¥240,827 million, an increase of ¥3,966 million compared to the
end of the previous consolidated fiscal year, due to a ¥3,695 million increase in Note and accounts receivable-trade; a ¥2,197 million increase in property, plant and equipment, at cost; and an additional ¥2,649 million in other current assets, due mainly to a rise in Prepaid expenses related to regular maintenance, while cash and bank deposits decreased by ¥4,236 million.
Total shareholders’ equity amounted to ¥78,897 million, an increase of ¥2,540 million compared to the end of the previous consolidated fiscal year, with ¥2,660 million in quarterly net income and a ¥523 million increase in Net unrealized holding gain on available-for-sale securities, although there was a ¥960 million decrease from the disbursement of dividends and a ¥55 million decrease due to bonus payments for directors and statutory auditors.
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Reference
Forecast of Consolidated Financial Results for FY2005 (April 1, 2005
to March 31, 2006)
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The Company has not revised its forecast. It may revise its full-year forecast when reporting FY2005 first-half results.
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Supplementary documents
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