November 1, 2019
Mitsubishi Chemical Holdings Corporation
Condensed Consolidated Financial Information
for the First Half of the Fiscal Year Ending March 31, 2020
1. Business Results for the First Half of the Fiscal Year Ending March 31, 2020 ("FY2019") (Business period: April 1, 2019 to September 30, 2019)
Millions of Yen | ||
The First Half of | The First Half of | |
the Current Fiscal Year | the Previous Fiscal Year | |
("FY2019") | ("FY2018") | |
April 1, 2019 - | April 1, 2018 - | |
September 30, 2019 | September 30, 2018 | |
(1) Results of Operations: | ||
Sales revenue | 1,827,690 | 1,881,905 |
Core operating income* | 130,758 | 187,150 |
Operating income | 130,557 | 185,582 |
Income before taxes | 122,428 | 183,017 |
Net Income | 101,711 | 146,896 |
Net income attributable to owners of the parent | 81,318 | 120,213 |
Comprehensive income | 26,833 | 197,881 |
- Core operating income is calculated as operating income (loss) excluding certain gains and expenses attributable to non-recurring factors.
(Yen) | |||
Earnings per share - Basic | 57.27 | 84.41 | |
- Diluted | 52.76 | 77.91 | |
(2) Segment Information: | |||
[Sales Revenue by Business Segment] | |||
Performance Products | 548,923 | 575,561 | |
Chemicals | 563,737 | 648,977 | |
Industrial Gases | 419,475 | 325,652 | |
Health Care | 205,281 | 229,276 | |
Others | 90,274 | 102,439 | |
Total | 1,827,690 | 1,881,905 | |
[Core Operating Income (Loss) by Business Segment] | |||
Performance Products | 40,519 | 45,692 | |
Chemicals | 35,991 | 82,010 | |
Industrial Gases | 44,276 | 26,934 | |
Health Care | 9,817 | 34,273 | |
Others | 5,435 | 3,050 | |
Elimination and corporate | (5,280) | (4,809) | |
Total | 130,758 | 187,150 | |
1
Millions of Yen | ||
As of September 30, 2019 | As of March 31, 2019 | |
(3) Financial Position: | ||
Total assets | 5,338,791 | 5,572,508 |
Total equity | 2,014,058 | 2,025,854 |
Equity attributable to owners of the parent | 1,380,067 | 1,377,947 |
Ratio of equity attributable to owners of the parent | 25.8 | 24.7 |
to total assets (%) | ||
Millions of Yen | ||
The First Half of | The First Half of | |
the Current Fiscal Year | the Previous Fiscal Year | |
("FY2019") | ("FY2018") | |
April 1, 2019 - | April 1, 2018 - | |
September 30, 2019 | September 30, 2018 | |
(4) Cash Flows: | ||
Net cash provided by (used in) operating activities | 251,187 | 221,456 |
Net cash provided by (used in) investing activities | (105,715) | (114,815) |
Net cash provided by (used in) financing activities | (220,997) | (124,449) |
Cash and cash equivalents at the end of the period | 234,210 | 263,108 |
Note:
Mitsubishi Chemical Holdings Corporation has classified the businesses of LSI Medience Corporation (LSIM) and its subsidiaries and affiliate as discontinued operations, based on the exchange all of its shares in LSIM. Therefore, sales revenue, core operating income, operating income and income before taxes in the consolidated financial results of the first half of the previous fiscal year and the current fiscal year encompass continuing operations and exclude discontinued operations.
2. Forecast for the Current Fiscal Year
Millions of Yen | |
FY2019 | |
April 1, 2019 - | |
March 31, 2020 | |
Sales revenue | 3,765,000 |
Core operating income | 250,000 |
Operating income | 241,000 |
Net income attributable to owners of the parent | 131,000 |
(Yen) | |
Earnings per share - Basic | 92.26 |
Note:
The profit and loss forecast for fiscal 2019 has been revised to the above from those announced on May 14, 2019.
2
3. Qualitative Information on Financial Results for the Term
- Business Performance
Performance Overview
During the first half of fiscal 2019 (April 1 through September 30, 2019), the business outlook remained uncertain for the Mitsubishi Chemical Holdings Group. This was notably in terms of supply and demand easing for some products, centered on semiconductor and automotive applications, amid concerns about U.S.-China trade friction.
It was against this backdrop that sales revenue for the term decreased ¥ 54.2 billion, or 2.9%, to
¥1,827.7 billion. Core operating income dropped ¥56.4 billion, or 30.1%, to ¥130.8 billion. Operating income declined ¥55.0 billion, or 29.6%, to ¥130.6 billion. Income before taxes was down ¥60.6 billion, or 33.1%, to ¥122.4 billion. Net income attributable to owners of the parent fell ¥38.9 billion, or 32.4%, to ¥81.3 billion.
In keeping with an exchange of all of its shares in LSI Medience Corporation, the Group classified the businesses of that consolidated subsidiary and its subsidiaries and affiliate as discontinued. In the first half of the year, the Group accordingly classified earnings related to those businesses as discontinued in comparison with the previous corresponding period.
Overview of Business Segments
The overview of financial results by business segment for the first half of fiscal 2019 is shown below. Gains or losses by segment are stated with core operating income which excludes gains or losses from non-recurring factors including losses incurred by business withdrawals, streamlining, and others.
In the following sections, all comparisons are with the same period of the previous fiscal year unless stated otherwise.
Performance Products Segment, Performance Products Domain
Sales revenue decreased ¥26.7 billion, to ¥548.9 billion. Core operating income was down ¥5.2 billion, to ¥40.5 billion.
In functional products, sales revenue declined. This was despite higher sales volumes in some information, electronics, and display-related products and in environment and living solutions, and reflected lower sales volumes in high-performance engineering plastics and other products for advanced moldings and composites, owing to weakened demand, principally in semiconductor and automotive applications.
In performance chemicals, sales revenue decreased, reflecting a drop in market prices for phenol-polycarbonate chain materials in advanced polymers, which were favorable in the same period of the previous fiscal year, despite an increase in sales volumes due to the impact of the previous fiscal
3
year's scheduled maintenance and repairs at the above-mentioned production facilities being resolved.
Core operating income decreased primarily due to a drop in market prices for phenol-polycarbonate chain materials in advanced polymers.
Major initiatives in the Performance Products segment during the first half of fiscal 2019 included:
- Mitsubishi Chemical Corporation in April 2019 decided to increase the annual production capacity of Soarnol ethylene vinyl alcohol copolymer resin of consolidated subsidiary Noltex LLC by 3,000 metric tons, to 41,000 metric tons. This development, effective in mid-2020, is in response to rising global demand for food packaging materials.
- Mitsubishi Chemical Corporation in June 2019 agreed to transfer the storage media and other global businesses of the Verbatim brand of Mitsubishi Chemical Media Co., Ltd., and assets related to that consolidated subsidiary to CMC Magnetics Corporation. This accord was part of business portfolio reforms under the Mitsubishi Chemical Holdings Group's medium-term management plan.
- MC PET Film Indonesia, a consolidated subsidiary of Mitsubishi Chemical Corporation, in September 2019 decided to lift its polyester film production capacity. The move enables the company to cater to optical applications for displays and to growing demand for multilayer ceramic capacitors and other industrial offerings in response to the expanding use of automotive electronics and a rising number of 5G-compatible base stations. Once the upgrade is completed at the end of 2021, annual production capacity in Indonesia will increase from 20,000 metric tons to 45,000 metric tons.
Chemicals Segment, Industrial Materials Domain
Sales revenue decreased ¥85.2 billion, to ¥563.7 billion. Core operating income was down ¥46.0 billion, to ¥36.0 billion.
In MMA, sales revenue declined amid weaker demand and a downturn in MMA monomer and other markets.
While sales volumes increased because of a smaller impact from scheduled maintenance and repairs at the ethylene production facility, prices declined owing mainly to lower raw materials costs and other factors.
In carbon products, sales revenue was down owing primarily to lower exported coke prices.
Core operating income decreased mainly attributable to the downturn in MMA monomer and other markets, despite higher sales volumes stemming from the lower impact of the scheduled maintenance and repairs in petrochemicals.
A major initiative in the Chemicals segment during the first half of fiscal 2019 included:
-
Japan Polypropylene Corporation, a consolidated subsidiary of Mitsubishi Chemical Corporation, in
4
July 2019 decided to halt production at one polypropylene line at its Kashima Plant, effective April 2020. This move is designed to reinforce the production infrastructure and rationalize amid the construction of a new polypropylene line at the Goi Plant as part of structural reforms to bolster profitability.
Industrial Gases Segment, Industrial Materials Domain
Sales revenue rose ¥93.8 billion, to ¥419.5 billion. Core operating income was up ¥17.4 billion, to ¥44.3 billion.
In industrial gases, sales revenue and core operating income increased, due to including the performance of the European and U.S. businesses acquired in the second half of the previous fiscal year.
Health Care Segment, Health Care Domain
Sales revenue declined ¥24.0 billion, to ¥205.3 billion. Core operating income was down ¥24.5 billion, to ¥9.8 billion.
In pharmaceuticals, sales revenue and core operating income decreased, primarily attributable to lower royalty revenues, despite higher sales volumes in mainly priority products in domestic ethical pharmaceuticals. With regard to royalty revenue from Novartis Pharma AG for Gilenya, a treatment agent for multiple sclerosis, a part of the revenue has not been recognized as sales revenue in accordance with IFRS 15 "Revenue from Contracts with Customers" due to the start of arbitration proceedings since February 2019. Due to the ongoing proceedings, sales revenue has not been recognized and decreased in the first half of the year under review.
Major initiatives in the Health Care segment during the first half of fiscal 2019 included:
- Life Science Institute, Inc. in August 2019 completed an exchange of shares with PHC Holdings Corporation (PHCHD) after obtaining competition low-related regulatory approval as part of a strategic capital partnership announced in May 2019. PHCHD thereby acquired all shares of LSI Medience Corporation. Life Science Institute obtained a 13.7% stake in PHCHD.
- Life Science Institute, Inc. in July 2019 started clinical trials with the Muse cell-based product CL2020 in patients with spinal cord injuries. Trials previously began for patients with acute myocardial infarction, ischemic stroke, and epidermolysis bullosa. Also in July 2019, cell processing center Tonomachi CPC was authorized to manufacture regenerative medicine products. Life Science Institute plans to apply for marketing approval in fiscal 2020.
- Mitsubishi Tanabe Pharma Corporation in July 2019 received approval from China's National Medical Products Administration for Ederavone (the U.S. brand name is Radicava) for a treatment for amyotrophic lateral sclerosis. The company previously obtained approval in Japan, Korea, the United States, Canada, and Switzerland.
5
This is an excerpt of the original content. To continue reading it, access the original document here.
Attachments
- Original document
- Permalink
Disclaimer
Mitsubishi Chemical Holdings Corporation published this content on 01 November 2019 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 November 2019 05:36:03 UTC