Strategic Businesses Make Solid Contribution to Earnings
Tokyo, Japan - May 10, 2005
Leading specialty chemicals and plastic products company, Kureha Chemical
Industry Co., Ltd. ("Kureha"), posted record profits for
fiscal 2004, the year ended March 31, 2005. Consolidated operating
income rose for the sixth consecutive year to ¥10.2 billion on sales
of ¥130.4 billion. Record profits are likely to be achieved again
in fiscal 2005.
The results suggest that Kureha's recent strategy of focusing on high
value-added products in growth areas is paying off. Advanced plastics
(super engineering plastic, polyphenylene sulphide (PPS ) resin),
pharmaceuticals (chronic kidney disease treatment, Kremezin)
and agrochemicals (fungicide, Metconazole) all made a significant
contribution to the fiscal 2004 financial results. A number of innovative
new products are also in the pipeline.
Kureha president and chief executive officer, Hiroshi Tanaka, said,
"Kureha is pleased to, once again, be able to report solid financial
results in fiscal 2004. Strategic management decisions made over the
past few years, including withdrawing from unprofitable businesses
and the company's new focus on specialty products, have clearly had
a positive impact on earnings. We anticipate that Kureha's new corporate
direction will have an increasingly positive impact on financial results
in fiscal 2005 and beyond."
Summary of financial performance
Summary of consolidated financial results
| |
(¥ million, except where stated) |
| |
Fiscal 2004
|
Fiscal
2003 |
Change (%) |
| Sales |
130,400 |
135,020 |
(3.4) |
Operating income
|
10,255 |
9,463 |
8.4 |
| Recurring income |
9,705 |
8,320 |
16.6 |
| Net incoma |
4,467 |
4,183 |
6.8 |
| Earnings per share (EPS)
(¥) |
23.41 |
21.45 |
9.1 |
|
Kureha recorded consolidated sales of ¥130.4 billion in fiscal 2004,
a 3.4% year-on-year decline. However, this modest decline can largely
be attributed to the company's strategic decision to withdraw from
the OEM production of PVC in fiscal 2003. Operating income rose by
8.4% to ¥10.2 billion. The operating profit margin improved from 7.0%
in fiscal 2003 to 7.9%, reflecting a larger contribution from the
company's higher margin advanced plastics, pharmaceuticals and agrochemicals
businesses.
Recurring income improved by 16.6% to ¥9.7 billion in fiscal 2004.
The increase in the global oil price resulted in a ¥1.8 billion increase
in raw material and fuel costs. However, Kureha was successfully able
to pass on this cost increase, thanks to higher sales volumes, which
contributed ¥740 million to recurring income, an improvement in the
company's non-operating financial balance (¥720 million), lower manufacturing
fixed costs (¥630 million), changes in the unit cost of purchased
products (¥410 million), and pricing changes (¥290 million).
Kureha is immune to the current high oil price environment because
of the company's ability to produce many of the raw materials used
in the production process, including the major feedstock raw materials
used in the production of PPS resin and the PPS resin itself. Net
income rose 6.8% to ¥4.5 billion, despite Kureha having booked ¥2.2
billion extraordinary losses, including following the withdrawal from
the PVC market. |
