Explanation of business overview and factors affecting sales and operating income by segment

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Consolidated Financial Highlights

(Billions of Yen)

( ) Denotes a minus

Items FY2014
1st Q 		FY2015
1st Q 		Increase
(Decrease) 		%
Sales 389.2 379.1 (10.1) (3%)
Operating income (loss) 10.4 22.7 12.3 118%
Non-operating income (expenses) (1.8) 0.5 2.3 -
Ordinary income (loss) 8.6 23.3 14.7 171%
Extraordinary gains / losses (0.4) (0.5) (0.1) -
Net income (loss) before income taxes and minority interests 8.2 22.7 14.5 178%
Profit (loss) attributable to owners of parent 3.4 16.8 13.4 397%
Exchange Rate (Yen / US$) 102 121 19
Domestic Standard Naphtha Price (Yen / KL) 69,900 49,000 (20,900)
Overview
  • Healthcare:
    Demand for ophthalmic lens materials and nonwoven fabrics was good due to expanded overseas demand.

  • Mobility:
    Strong demand for elastomers and PP compounds continued in overseas. Healthy demand for functional polymers continued, especially in electronic and information applications.

  • Food & Packaging:
    Healthy demand for high-value -added performance films and sheets and expanded sales from new products.
    Health trends domestic and overseas sales for agrochemicals.

  • Operating rates for domestic petrochemicals remained at a high level.

  • Business restructuring and cost cutting progressed as scheduled in bulk & commodity products.
  • Severe conditions continued overseas causing a downturn for polyurethane materials.
Overview of increase/decrease by segment (sales and operating income, year-on-year) Description of Increase / Decrease in Healthcare Increase / Decrease of Net Sales (1st Quarter of FY2015 vs. 1st Quarter of FY2014)
46.5 billion yen ( +12.3 billion yen year on year ) Volume +11.6 billion yen- Increase in overseas demand for ophthalmic lens materials, nonwovens, etc.
- Increase from fiscal period adjustment of dental material businessPrice +0.7 billion yen
Increase / Decrease of Operating Income (1st Quarter of FY2015 vs. 1st Quarter of FY2014)
1.9 billion yen ( (0.6) billion yen year on year ) Volume +0.7 billion yen- Sales growth from expanded export of ophthalmic lens materials, nonwovens, etc.Terms of trade +0.3 billion yenCosts (1.6) billion yen- Increase in fixed costs from depreciation of goodwill related to fiscal period adjustment of dental material business etc.
Description of Increase / Decrease in Functional Polymeric Materials Increase / Decrease of Net Sales (1st Quarter of FY2015 vs. 1st Quarter of FY2014)
46.4 billion yen ( +3.8 billion yen year on year ) Volume +1.0 billion yen- Increase from brisk sales in elastomers and functional compounds attributed to expanded global automotive use demand
- Increase from brisk sales in functional polymers from expanded demand for electronic and information-related applicationsPrice +2.8 billion yen- Increase from foreign exchange gains
Increase / Decrease of Operating Income (1st Quarter of FY2015 vs. 1st Quarter of FY2014)
7.6 billion yen ( +3.7 billion yen year on year ) Volume +1.0 billion yen- Increase from brisk sales in elastomers and functional compounds attributed to expanded automotive use demand
- Increase from brisk sales in functional polymers from expanded demand for use in smartphones, electronic and information film applicationsTerms of trade +2.5 billion yen- Increase from weak yen, etc.Costs +0.2 billion yen
Description of Increase / Decrease in Polyurethane Increase / Decrease of Net Sales (1st Quarter of FY2015 vs. 1st Quarter of FY2014) Increase / Decrease of Operating Income (1st Quarter of FY2015 vs. 1st Quarter of FY2014)
(1.7) billion yen ( +0.5 billion yen year on year ) Volume 0.0 billion yenTerms of trade +0.7 billion yen- Increase from weak yen offset drop in overseas market prices of polyurethane materialsCosts (0.2) billion yen
Description of Increase / Decrease in Basic Chemicals Increase / Decrease of Net Sales (1st Quarter of FY2015 vs. 1st Quarter of FY2014)
74.8 billion yen ( (10.8) billion yen year on year ) Volume +1.4 billion yenPrice (12.2) billion yen- Decrease in market prices due to downturn in oil prices, etc.
Increase / Decrease of Operating Income (1st Quarter of FY2015 vs. 1st Quarter of FY2014)
1.0 billion yen ( +4.1 billion yen year on year ) Volume +0.1 billion yenTerms of trade +2.9 billion yen- Market prices, etc.Costs +1.1 billion yen- Rationalizations, etc.
Description of Increase / Decrease in Petrochemicals Increase / Decrease of Net Sales (1st Quarter of FY2015 vs. 1st Quarter of FY2014)
131.0 billion yen ( (20.7) billion yen year on year ) Volume +3.5 billion yen- Increase from strong overseas demand for automotive PP compounds, etc.Price (24.2) billion yen- Effect of downturn in oil prices, etc.
Increase / Decrease of Operating Income (1st Quarter of FY2015 vs. 1st Quarter of FY2014)
10.8 billion yen ( +3.3 billion yen year on year ) Volume +0.7 billion yen- Increase from strong demand for overseas PP compounds, etc.Terms of trade +4.9 billion yen- Improvement of production rates, etc.Costs (2.3) billion yen- Decrease due to inventory reduction, etc
Description of Increase / Decrease in Food & Packaging Increase / Decrease of Net Sales (1st Quarter of FY2015 vs. 1st Quarter of FY2014)
Volume +1.7 billion yen- Increase in demand for high-value-added performance films and sheets and expanded sales of new products
- Increase in agrochemicals sales following drop in previous year following domestic consumption tax hikePrice +0.4 billion yen- Increase from foreign exchange gains
Increase / Decrease of Operating Income (1st Quarter of FY2015 vs. 1st Quarter of FY2014)
Volume +1.0 billion yen- Increase in sales of performance films and sheets, and agrochemicalsTerms of trade +1.0 billion yen- Increase from weak yen, etc.Costs (0.4) billion yen- Decrease in fixed cost related to research and development costs in agrochemicals, etc.
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