On November 9, 2022 Kuraray reported that Consolidated Earnings Report for the Third Quarter of the Fiscal Year Ending
December 31, 2022 (Press release, Kuraray, NOV 9, 2022, https://pdf.irpocket.com/C3405/aG1f/Ivrn/rOhn.pdf [SID1234623644])
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1. Consolidated Financial Results for the Third Quarter of the Fiscal Year Ending December 31, 2022 (January 1, 2022 to September 30, 2022)
(1) Consolidated Operating Results (Percentage changes displayed for net sales, operating income, ordinary income and net income attributable to owners of the parent are comparisons with the corresponding period of the previous fiscal year.)
(2) Consolidated Financial Position
2. Dividends
3. Forecasts of Consolidated Financial Results for the Fiscal Year Ending December 31, 2022 (January 1, 2022 to December 31, 2022) (Percentage changes displayed for net sales, operating income, ordinary income and net income attributable to owners of the parent are comparisons with the previous fiscal year.)
1. Qualitative Information regarding Business Results
(1) Overview of Consolidated Business Results In the third quarter of fiscal 2022 (January 1, 2022–September 30, 2022), the world economy continued to gradually recover as restrictions on economic activities were eased. However, the recent trend toward economic deceleration grew stronger due in part to a rise in interest rates in various countries amid rapid inflation and the prolonged Russia-Ukraine crisis, causing the future outlook to become even murkier. Amid these circumstances, consolidated operating results for the third quarter of fiscal 2022 are as follows: net sales were ¥553,150 million (¥459,159 million in the same period of the previous fiscal year); operating income was ¥70,846 million (¥54,318 million in the same period of the previous fiscal year); ordinary income was ¥70,078 million (¥51,001 million in the same period of the previous fiscal year); and net income attributable to owners of the parent was ¥47,174 million (¥28,602 million in the same period of the previous fiscal year). Furthermore, in the third quarter, we recorded an extraordinary loss of ¥5,429 million as costs related to the suspension of operations due mainly to the suspension of some production facilities at a U.S. subsidiary.
On January 1, 2022, the Company revised its organizational structure and changed the segment classification of the aqua business from "Others" to "Functional Materials." In addition, the method of allocating eliminations of profits from some internal transactions among segments and the corporate has been changed. Figures used in comparisons and analyses of the third quarter reflect these changes.
Furthermore, from January 1, 2022, we have adopted the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29; March 31, 2020). In line with the transition provisions set out in the revision to paragraph 84, the new accounting principle was not retroactively applied to the consolidated third quarter of the previous fiscal year. Net sales for the Trading segment and elimination & corporate for the third quarter of fiscal 2022 have significantly changed compared to the third quarter of fiscal 2021, mainly due to changes in accounting methods for revenues attributable to agent transactions in the Trading segment as a result of the adoption of the Accounting Standard for Revenue Recognition and other factors. Because of these changes, revenues from such transactions, which have previously been recorded on the basis of total transactional value, are now recorded on a net basis. Due to this change, net sales in the Trading segment was ¥63,010 million lower compared with the original method. To realize its long-term vision, Kuraray Vision 2026, the Group launched a medium-term management plan, "PASSION 2026," from January 1, 2022.
In line with "PASSION 2026," we set three challenges to tackle:
1) Sustainability as an opportunity,
2) Innovations starting from networking, and
3) Transformation of people and organizations. Through these initiatives, we aim to establish an upgraded business portfolio and, in fiscal 2026, the centennial of Kuraray’s founding, achieve net sales of ¥750.0 billion and operating income of ¥100.0 billion.
Results by Business Segment Vinyl Acetate Sales in this segment were ¥285,641 million (¥224,861 million in the same period of the previous fiscal year), and segment income was ¥58,987 million (¥43,775 million in the same period of the previous fiscal year).
(1) The sales volume of PVOH resin decreased due to the suspension of some production facilities at a U.S. subsidiary because of malfunctions and logistics disruptions. On the other hand, we continued revising prices amid soaring raw material and fuel prices. Shipments of optical-use poval film declined significantly in the July–September 2022 period due to the impact of LCD panel inventory adjustments. In addition, to meet needs for larger TV panel sizes, we decided to make a capital investment at the Kurashiki Plant (slated to begin operating in mid 2024), announcing this intention on May 9, 2022. As for Advanced Interlayer Solutions, the sales of PVB film for use in construction applications held steady. Sales of water-soluble PVOH film were firm for use in unit dose laundry detergent packets.
(2) As for EVAL ethylene vinyl alcohol copolymer (EVOH resin), the sales volume increased as steady performance for use in food packaging 4 applications offset a decrease for use in automotive applications. We also revised prices.