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Toray income dives on declining demand due to COVID-19

August 10/2020

MOSCOW (MRC) -- Toray Industries reports a 62.8% drop in net income for its fiscal first quarter ended 30 June, to ?9.5 billion (USD90 million), compared with ?25.6 billion a year earlier, according to Chemweek.

Operating income plummeted 63.7% year on year (YOY) to ?12.5 billion. Revenue was ?397.6 billion, a decrease of 22.5% YOY.

Sales by Torays fibers and textiles segment were ?145 billion, a decline of 25.9%. Operating income plunged 50.3% YOY to ?7.2 billion. All applications of the segments products were affected by stagnation in production activities and consumption behavior caused by the COVID-19 pandemic in Japan and overseas. In apparel applications, demand declined due to lockdowns and the closure of retail stores in various countries. In industrial applications, sales volume for mainstay automotive applications decreased as car manufacturers suspended operations and decreased production volume.

Sales by Torays performance chemicals business decreased 21.2% YOY to ?155.6 billion and operating income plunged 52% YOY to ?8.1 billion. Toray says that in the resins business, demand from automotive and industrial applications declined in Japan and overseas. The chemicals business was pressured by a decline in the basic chemicals market. In the films business, sales of packaging materials were strong, reflecting the growing demand for home meals. Demand for battery separator films for lithium-ion secondary batteries and polyester films remained low. The company says that COVID-19 drove down the performance of this business.

In the carbon fiber composite materials unit, wind turbine blade and casing applications remained strong in industrial applications. Aircraft applications were hurt by a decline in the production rate of large-sized passenger aircraft. Operating income fell 73.4% YOY to ?1.7 billion on sales of ?45.4 billion, down by 26.2% YOY.

Sales by Torays environment and engineering segment were ?37.2 billion, a decline of 11.2% YOY. Operating income plunged 40% YOY to ?800 million. The company says that demand for reverse osmosis membranes and other products grew strongly and that shipments to some regions were curtailed by the pandemic.

The companys other business segment is life sciences.

Toray has issued forecasts for the full fiscal year ending 31 March 2021. It anticipates full-year net income of ?40 billion and sales of ?1.8 trillion. Toray says it calculated the forecasts based on the assumption that the worldwide impact of COVID-19 would pass its peak in the fiscal second quarter and that economies in Japan and abroad would start on a recovery track in the third quarter.

As MRC reported earlier, in December 2018, Toray Industries, Inc., announced its decision to enhance production capacity of acrylonitrile-butadiene-styrene (ABS) resin TOYOLAC, manufactured at and distributed by Toray Plastics (Malaysia) Sdn. Berhad. The company will add a facility with production capacity of 75,000 tons annually to expand the sales of high performance varieties such as transparent grade, which has the No. 1 global market share, and start its operation in November 2020. The move will increase TPMs production capacity to 425,000 tons a year and Toray Groups capacity with the existing facility at Torays Chiba Plant to 497,000 tons a year.

According to MRC's ScanPlast report, Russia's estimated consumption decreased in January-June 2020 by 18% year on year in the acrylonitrile-butadiene-styrene (ABS) sector, totalling 19,360 tonnes. 2,680 tonnes of ABS plastics were processed in June 2020.
Author:Margaret Volkova
Tags:PS, ABS, car components, petrochemistry, Toray, Russia, Japan.
Category:General News
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