Business profitability fell considerably for consolidated subsidiary Tokai Carbon (Tianjin) Co., Ltd. due to such factors as a drop in product prices resulting from an increase in inexpensive Chinese-made carbon black and rapidly worsening market conditions caused by the slowdown in the Chinese economy. The company conducted a review of the forecast based on the current business environment, which indicates that the Tokai Carbon Group will post an impairment loss of approximately ¥4 billion for carbon black production facilities owned by Tokai Carbon (Tianjin) Co., Ltd.
Non-consolidated
The non-consolidated results are expected to include approximately ¥5.1 billion in loss on devaluation of investments in affiliates, due to a decline in the real value of funds invested in Tokai Carbon (Tianjin) Co., Ltd.
This loss will have no effect on consolidated results since losses on devaluation of investments in affiliates are eliminated within the Group.
Revisions to Earnings Forecast
Revisions to the consolidated earnings forecast for the full year ending December 31, 2015
Net sales
Operating income
Ordinary income
Net income
Net income per share
Previous forecast (A)
Millions of yen
Millions of yen
Millions of yen
Millions of yen
Yen
106,000
4,800
5,000
2,100
9.85
Revised forecast (B)
105,000
4,000
4,200
2,400
11.26
Increase/decrease (B-A)
△1,000
△800
△800
300
－
Rate of change (%)
△0.9
△16.7
△16.0
14.3
－
(Reference) Results of the previous fiscal year ended
December 31, 2014
114,576
3,703
4,180
2,562
12.00
Reason for revisions
In the consolidated earnings for the fiscal year ending December 31, 2015, operating income and ordinary income will be lower than their previous forecasts, primarily due to a loss on valuation of inventory, which was caused by falling raw material prices, a downturn in operations and other reasons.
Net income is expected to exceed the previous forecast. Despite the aforementioned drop in operating income and ordinary income and the impairment loss described in "1. Extraordinary losses," Tokai Carbon will record gains in extraordinary income due to the sale of investment securities and the transfer of fixed assets. These two events were announced on December 15 and December 18, 2015, respectively.
* The above earnings forecast is based on the information currently available to the Company along with a certain set of assumptions that are deemed rational. Actual results may differ significantly from these forecasts due to various factors.
End of Notice
Tokai Carbon Co. Ltd. issued this content on 28 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 28 January 2016 03:24:25 UTC
Original Document: http://v3.eir-parts.net/EIR/View.aspx?template=ir_material&sid=48687&code=5301
Tokai Carbon Co., Ltd. is one of the Japanese leaders in manufacturing and marketing of coal and graphite products. The group is also producing industrial furnaces. Net sales break down by family of products as follows:
- coal and graphite products (69.6%): coal, graphite electrodes, special graphite and friction materials primarily for industrial, electronic, energy, automotive and mechanic applications;
- cathodes for smelting aluminum and furnace linings (18.1%);
- industrial furnaces and heating products (6.9%): for thermal processing of ceramic products, electronic components, metals, glasses, etc.;
- other (5.4%).
Net sales break down geographically as follows: Japan (24.6%), Asia (26.7%), the United States (26.5%), Europe (11.6%) and other (10.6%).
TOKAI CARBON CO., LTD. 
