On November 17, 2021 Nippon Kayaku reported that Results for the Second Quarter of the Fiscal Year Ending March 31, 2022 (Press release, Nippon Kayaku, NOV 17, 2021, View Source [SID1234595724])
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1. Consolidated Business Results for the Second Quarter of the Fiscal Year Ending March 31, 2022 (April 1, 2021–September 30, 2021)
(1) Consolidated Operating Results
(2) Consolidated Financial Position
2. Status of Dividends
3. Consolidated Business Results Forecasts for the Fiscal Year Ending March 31, 2022 (April 1, 2021– March 31, 2022)
1. Qualitative Information Concerning Results for the Second Quarter
(1) Analysis of Operating Results During the first half of this consolidated fiscal year (April 1 to September 30, 2021), the global economy saw economic activity begin to return to normal and signs of economic recovery, due in part to progress on vaccinations for the novel coronavirus (COVID-19). While the recovery of the Japanese economy is lagging compared to Europe and the U.S., business sentiment has improved. However, the impacts of the semiconductor shortage and the automobile industry production cuts due to difficulty of procuring parts accompanying the spread of COVID-19 in Southeast Asia were exacerbated in Japan and overseas, particularly in the second quarter of this consolidated fiscal year.
Concerns over deceleration of the Chinese economy also remain. Amid these conditions, the Nippon Kayaku Group worked to implement the key themes and resolve the midand long-term key issues outlined in "KAYAKU Next Stage," the mid-term business plan launched in the fiscal year ended March 31, 2020, while also making active use of staggered working hours, telecommuting, and other systems amid the restrictions imposed on corporate activities. We took these steps to ensure the safety of employees working in the Company and at Group companies while also implementing a new lifestyle and promote efficient workstyles aimed at minimizing the impact on our business. As a result, net sales for the first half of this consolidated fiscal year totaled 88,840 million yen, an increase of 8,321 million yen (10.3%) year-on-year. Sales in all of the businesses outperformed the first half of the previous fiscal year.
Operating income totaled 10,902 million yen, an increase of 3,925 million yen (56.3%) year-on-year. Ordinary income totaled 11,828 million yen, an increase of 4,487 million yen (61.1%) year-on-year. Profit attributable to owners of parent was 9,205 million yen, an increase of 4,322 million yen (88.5%) year-on-year. Regarding changes in accounting policies, the Company implemented the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, revised March 31, 2020) and other guidance from the beginning of the first quarter of this consolidated fiscal year. We have therefore used numbers based on calculation methods subject to different standards than in the same period of the previous fiscal year. See
2. Quarterly Consolidated Financial Statements and Notes to Quarterly Consolidated Financial Statements,
(4) Notes to Quarterly Consolidated Financial Statements (Changes to Accounting Policies) for further details. Performance by business segment is as described below. [Functional Chemicals Business] Sales stood at 37,612 million yen, an increase of 2,762 million yen (7.9%) year-on-year. The Functional Materials Business as a whole outperformed the first half of the previous fiscal year. The outperformance resulted from strong sales of epoxy resins used in semiconductor encapsulation, circuit boards, and LCD cleaners from increased demand for IT equipment due to telecommuting, in addition to the proliferation of high-speed (5G) communications devices and IoT, and the increasingly sophisticated electronic equipment in vehicles. The Color Materials Business as a whole outperformed the first half of the previous fiscal year.
This outperformance was due to a rebound in demand for colorants for inkjet printers in industrial applications, in addition to strong sales of colorants for inkjet printers for consumer use. The Catalyst Business underperformed the first half of the previous fiscal year because of the lull between customer replacement periods. In the Polatechno Business, a rebound in demand for polarizing films for LCD projectors and dye-type polarizing films, in addition to strong sales of components for X-ray analysis systems resulted in outperformance of the Polatechno Business as a whole, compared with the first half of the previous fiscal year. Segment profit totaled 6,074 million yen, an increase of 2,427 million yen (66.6%) year-on-year. This increase resulted from growth in net sales in each business. [Pharmaceuticals Business] Sales stood at 25,534 million yen, an increase of 400 million yen (1.6%) year-on-year. Pharmaceuticals in Japan underperformed the first half of the previous fiscal year due to the impact from drug price revisions, despite market penetration of PORTRAZZA, a biomedicine; the switch to antibody biosimilars, TRASTUZUMAB BS and INFLIXIMAB BS; growth in sales of a cancer-related generic, APREPITANT capsule; and the launch of the new generic anti-cancer drug PEMETREXED in July. Sales of active pharmaceutical ingredients for the Japanese domestic market underperformed while exports, and sales of contract production and diagnostic drugs outperformed the same period of the previous fiscal year. Segment profit totaled 4,115 million yen, a decrease of 218 million yen (5.0%) year-on-year.
This resulted from the impact of drug price revisions, in addition to increased expenses related to sales activities adjusted to the new life style and progress on R&D activities.