First Quarter, Overview of 2023 Financial Statements
Business Results
(Unit: billions of yen)
| Net Sales | 298.9 | Increase / decrease (9.1) |
|---|---|---|
| Operating Income | (9.2) | (25.0) |
| Ordinary Income |
(10.9) |
(31.2) |
| Net Income Attributable to Owners of the Parent | (12.3) | (21.1) |
| Net Income Attributable to Owners of the Parent per Share | (¥67.71) | (¥116.65) |
In the three-month period ended March 31, 2023 (“2023 1Q”), while the global restraint caused by the pandemic of COVID-19 eased and normalization progressed, the global economy showed progress of inflation, energy and raw material price rise caused by the prolonged situation in Ukraine, occurrence of supply constraints continued, and standstills in the recovery of consumption were seen in some regions. Also, we saw the adjustments in the semiconductor industry, which had been performing steadily, expanded. In the Japanese economy, consumer spending and corporate capital investment showed signs of a gradual recovery.
Consolidated sales for 2023 1Q decreased to ¥298,919 million, down 2.9% from the corresponding three-month period of the previous year (“2022 1Q”). Sales of the Chemicals segment increased from 2022 1Q, due to sales volume increase of the Petrochemicals subsegment, which was affected by the once-in-four-year large-scale maintenance shutdown in the corresponding period of the previous year, and due to sales increase of the Graphite Electrodes subsegment.
Sales of the Semiconductor and Electronic Materials segment decreased significantly, due to the adjustments in the semiconductor related market, while other two segments, the Mobility segment and the Innovation Enabling Materials segment, also decreased sales. Consolidated operating loss was ¥9,208 million for 2023 1Q, a deterioration of ¥24,979 million from 2022 1Q, due to significant decrease in the Semiconductor and Electronic Materials segment, despite the sales increase in the Chemicals segment. Non-operating income decreased mainly due to a decrease in foreign exchange gains and an increase in interest expenses, and consolidated ordinary loss was ¥10,909 for 2023 1Q, a deterioration of ¥31,233 million from 2022 1Q. Net loss attributable to owners of the parent for 2023 1Q was ¥12,263 million, a deterioration of ¥21,125 million from 2022 1Q, mainly due to a decrease in income taxes payment.
Segment Information
Net sales by Segment
(Unit: billions of yen)
| Semiconductor and Electronic Materials | 69.4 | (38.0) |
|---|---|---|
| Mobility | 42.5 | (1.9) |
| Innovation Enabling Materials | 30.0 | (4.3) |
| Chemicals | 127.1 | + 32.0 |
Operating Income by Segment
(Unit: billions of yen)
| Semiconductor and Electronic Materials | (10.4) | Increase / decrease (23.5) |
|---|---|---|
| Mobility | (0.5) | (1.0) |
| Innovation Enabling Materials | 2.0 | (0.9) |
| Chemicals | 3.9 | + 1.7 |
Semiconductor and Electronic Materials
In the Semiconductor and Electronic Materials segment, sales of both Front-end Semiconductor Materials and Backend Semiconductor Materials subsegments decreased due to continued weakness in the semiconductor market since the 2nd half of the previous year. In Device Solutions subsegment, sales decreased significantly due to continued weakness in HD media demand for data centers from the fourth quarter of the previous year, while SiC epitaxial wafers’ sales increased. As a result, sales in this segment decreased significantly from 2022 1Q. Operating loss was recorded due to a decrease in sales as well as inventory write-downs and loss on disposal of inventories of HD Media.
Mobility
In the Mobility segment, sales of Automotive Products subsegment decreased due to the divesture of ISOLITE GmbH in the July-September quarter of the previous fiscal year. Sales of Lithium-ion Battery Materials subsegment decreased due to a decline in consumer demand. As a result, sales and operating income in this segment decreased from 2022 1Q.
Innovation Enabling Materials
In the Innovation Enabling Materials segment, sales decreased due to a decrease in sales volume, although selling prices were raised due to higher raw material prices. Operating income decreased due to a time lag in price passthrough.
Chemicals
In the Chemicals segment, sales and operating income of the Petrochemicals subsegment increased significantly from 2022 1Q due to higher selling prices caused by higher naphtha prices, as well as the absence of shutdowns related to large-scale maintenance and earthquakes. In the Basic Chemicals subsegment, sales and operating income increased from 2022 1Q as a result of progress in passing on higher raw material and fuel prices. Sales of the Graphite Electrodes subsegment increased from 2022 1Q due to selling price increase based on the cost increase, while operating income decreased due to the negative impact of the inventory valuation difference.
Financial Conditions
(Unit: billions of yen)
| Total Assets | 2,026.3 | Increase / decrease (67.4) |
|---|---|---|
| Total Equity | 5,560 | (18.8) |
| Stockholders' Equity Ratio | 26.2% | (0.1p) |
Total assets at the end of 2023 1Q decreased by ¥67,419 million from the end of the previous fiscal year 2022 to ¥2,026,325 million due to decreases in cash and deposits and notes and accounts receivable-trade. Total liabilities decreased by ¥48,665 million to ¥1,470,361 million due to decreases in notes and accounts payable-trade and interestbearing debt. Net assets decreased by ¥18,754 million, to ¥555,964 million, due to a decrease in retained earnings due to the payment of dividends in the previous fiscal year, despite an increase in foreign currency translation adjustments account.