MOSCOW (MRC) -- Mitsubishi Chemical Holdings reports a net loss of Yen 49.68 billion (USD474.7 million) for the company's fiscal first half ended 30 September, swinging from net income of Yen 81.3 billion a year earlier, according to Chemweek.
Mitsubishi registered a third-quarter operating loss of Yen 28.1 billion, compared with an operating profit of ?130.5 billion a year earlier. Revenue decreased 17.6% year on year (YOY) to Yen 1.5 trillion. The company says that during the first half of the fiscal year, demand was slower YOY, particularly for automotive applications, owing to the impact of the COVID-19 pandemic. Notwithstanding a recent pickup in demand, business conditions remain challenging, says Mitsubishi.
Sales decreased by 16% YOY to ?473.6 billion at Mitsubishi's performance products business. Operating income plunged 46% YOY to Yen 21.4 billion. Functional products' revenue declined because of reduced demand principally in automotive applications, despite the recent pickup in demand. Sales volumes fell for high-performance engineering plastics and other offerings for advanced moldings and composites. In performance chemicals, revenue decreased amid lower overall sales volumes to the automotive industry, including for performance polymers in the advanced polymers segment. Another downside for sales volumes was the impact of scheduled maintenance and repairs at phenol-polycarbonate chain facilities in the advanced polymers segment.
Sales decreased by 31.5% YOY to ?381 billion at the chemicals business, Mitsubishi’s largest segment. It swung to an operating loss of Yen14.6 billion from an operating profit of Yen 35.8 billion a year earlier. In the methyl methacrylate (MMA) business, revenue declined despite improving conditions in the MMA monomer and other markets. In petrochemicals, sales decreased because of a greater impact from scheduled maintenance and repairs at an ethylene plant, with selling prices down following declines in raw material costs and other factors. In carbon products, revenue was down because of lower prices in line with reduced raw material costs and a drop in sales volumes from declining demand for coke and other offerings.
Operating income at the industrial gases business was down 19.6% YOY, to Yen 35.5 billion. Sales at this division were Yen 381 billion, lower by 9% YOY. Profitability was weak amid lower domestic and overseas demand, although demand for electronics-related gases remained strong.
The company’s other units include healthcare.
Mitsubishi has downgraded its forecast for the fiscal year ending 31 March 2021. It now projects a net loss of ?34 billion, compared with a previously estimated net profit of Yen 49 billion. Sales projections have been lowered to ?3.1 trillion, versus an earlier estimate of Yen 3.3 trillion. In the first half, the company included an Yen 84.5-billion impairment loss on technology-related intangible assets in the healthcare segment.
No changes have been made to guidance for full-year operating income, which is expected to reach Yen 137 billion. This is because while market conditions for MMA and other products in the chemicals segment are likely to be less favorable than initially expected, selling, general, and administrative expenses and R&D expenditure in the healthcare and other segments are projected to decline, Mitsubishi says.
As MRC reported before, Mitsubishi Chemical Holdings Corp said in late October 2020 it had appointed Belgium-born Jean-Marc Gilson as its next chief executive officer and president, effective April 2021. Gilson, currently CEO of French plant-based ingredient maker Roquette Group, will join a short list of foreign CEOs at listed Japanese companies.
The main application, consuming approximately 75% MMA, is in the production of polymethyl methacrylate acrylic plastics (PMMA). Methyl methacrylate is also used to produce methyl methacrylate-butadiene-styrene copolymer (MBS) used as a modifier for polyvinyl chloride (PVC).
According to MRC's ScanPlast report, September total production of unmixed PVC grew to 86,000 tonnes from 75,500 tonnes a month earlier, SayanskKhimPlast and RusVinyl increased their capacity utilisation. Overall output of polymer were 718,500 tonnes in the first nine months of 2020 versus 720,500 tonnes a year earlier, only two producers raised their production volumes, and RusVinyl cut its output.
Mitsubishi Chemical, a Japanese integrated chemical company, was established on October 1, 1990 through the merger of Mitsubishi Kasei and Mitsubishi Petrochemical Co. Due to its wide range of activities, it is one of the ten leading chemical companies in the world.
MRC