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Mitsui Chemicals reports higher profit on lower sales, raises forecast

February 15/2021

MOSCOW (MRC) -- Mitsui Chemicals has registered 6.4% growth in net profit for the fiscal first nine months ended 31 December, to Yen 33 billion (USD313 million), compared with ?31 billion in the year-ago period. Operating income fell 6% year on year (YOY) to Yen 51.9 billion on net sales of ?857.4 billion, down 15% YOY, according to Chemweek.

Selling prices decreased in line with lower costs of naphtha and other raw materials, the company adds.

Mitsui's mobility unit registered a 41.0% YOY decline in operating income to Yen 19.5 billion, with a 21.4% decline in sales to ?220.8 billion. The segment was hurt by poor demand for cars. The company says the elastomers, performance compounds, overseas polypropylene (PP) compounds, and solutions businesses performed weakly because of the COVID-19 pandemic. Sales were healthy in performance polymers, and demand for information communication technology products was solid.

Mitsui's basic materials business registered an operating profit of Yen 5.3 billion, down by 53% YOY, compared with an operating profit of Yen 11.2 billion a year earlier. Sales at this sector were Yen 381.8 billion, down 17.5% YOY. Naphtha-cracker operating rates were lower compared with the year-earlier period because of lower demand for downstream products due to COVID-19. The sluggish automotive sector weakened the performance of Mitsui's PP business. Higher demand for sanitizers boosted the company's acetone business overseas.

Operating income plunged 61% YOY to Yen14.8 billion at Mitsui's healthcare unit, with revenue of Yen 105.7 billion, down 1.1% YOY. The pandemic hurt sales of dental- and vision-care materials. In nonwoven fabrics, sales of masks, medical gowns, and disposable diapers stayed healthy.

Sales decreased 3.9% YOY to ?139.3 billion in the food and packaging business unit, with operating income of ?15.2 billion, up 31% YOY. Sales of performance films, sheets, and agricultural chemicals were strong. Sales of coatings and engineering materials were low due to COVID-19.

Mitsui has raised its forecast for the full fiscal year ending 31 March 2021. It now projects sales of Yen 1.215 trillion, compared with a previous estimate of Yen 1.175 trillion. Revised full-year operating income stands at Yen 77 billion, versus an earlier forecast of Yen 50 billion. The new net-income guidance is ?53.5 billion, against a previous forecast of Yen 37.5 billion.

Mitsui expects higher income because of stable overseas markets and progress in reducing fixed costs.

As MRC informed earlier, Mitsui Chemicals operated its naphtha cracker normally following a maintenance turnaround. The company resumed operations at the cracker on July 19, 2020. The cracker was shut for maintenance on June 11, 2020. Located in Osaka, Japan, the cracker has an ethylene capacity of 500,000 mt/year and a propylene capacity of 280,000 mt/year.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 2,220,640 tonnes in 2020, up by 2% year on year. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, polypropylene (PP) shipments to the Russian market reached 1 240,000 tonnes in 2020 (calculated using the formula: production, minus exports, plus imports, excluding producers' inventories as of 1 January, 2020). Supply of exclusively PP random copolymer increased.

Mitsui Chemicals is a leading manufacturer and supplier of value added specialty chemicals, plastics and materials for the automotive, healthcare, packaging, agricultural, building, and semiconductor and electronics markets. Mitsui Chemicals is a Japanese Chemicals company, a part of the Mitsui conglomerate. The company has a turnover of around 15 billion USD and has business interests in Japan, Europe, China, Southeast Asia and the USA. The company mainly deals in performance materials, petro and basic chemicals and functional polymeric materials.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, PP random copolymer, propylene, LDPE, HDPE, elastomer, ethylene, compounding, coatings, medicine, nonwovens, petrochemistry, clothes and accessories, Mitsui, Russia, Japan.
Category:General News
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