Overview of Business Results
for the 1st Half of Fiscal Year Ending March 31, 2024
(April 2023 → September 2023)
October 31, 2023
Santo-kun
https://www.sanyo-steel.co.jp/(Our mascot)
Table of Contents
1. FY2023 1st Half Results and FY2023 Forecast
Outline of Statements of Income
Business Environment
Business Forecast for FY2023
Interim Dividend and Dividend Forecast for FY2023
- Achieving Carbon Neutrality (CN) by 2050
- Details of Results and Forecast for FY2023
Net Sales and Income (Quarterly),
Earnings by Business Segment, Balance Sheets (Consolidated), Statements of Cash Flows (Consolidated) Ordinary Income Variance Analysis (FY2022/1H → FY2023/1H, FY2023/1Q → FY2023/2Q,
FY2022 → FY2023 Revised Forecast, FY2023/1H → FY2023/2H Revised Forecast,
FY2023 Previous Forecast → FY2023 Revised Forecast) Review of Performance; OVAKO and SSMI
- Topics
- Reference
Achieving Carbon Neutrality (CN) by 2050
Trends in Main Market
Net Sales and Income (Fiscal), Capital Expenditure and Depreciation, D/E Ratio
Details of Statements of Income, etc.
© 2023 Sanyo Special Steel Co., Ltd. All Rights Reserved. | 2 |
1. FY2023 1st Half Results
and FY2023 Forecast
Business Results
Outline of Statements of Income
Ordinary Income : 7.8 billion yen (Compared to FY2022/1H : -5.9 billion yen)
Revenue and profit decreased due to decline in sales volume and decrease of positive OVAKO's transient factors.
- Although sales prices increased through applying energy surcharge, etc. revenue and profit declined due to drop in sales volume, rising raw material and fuel prices and inflation impact of other materials. Decrease of positive OVAKO's transient factors affected us as well.
(Unit: Billion yen) | ||||||||
FY2023/1H (A) | FY2022/1H (B) | Change (B) → (A) | ||||||
Amount | Ratio (%) | Amount | Ratio (%) | Amount | Ratio (%) | |||
Net Sales | 185.3 | 100.0 | 195.4 | 100.0 | -10.2 | -5.2 | ||
Operating Income | 7.3 | 4.0 | 13.2 | 6.7 | -5.9 | -44.4 | ||
Ordinary Income | 7.8 | ROS 4.2 | 13.7 | ROS | 7.0 | -5.9 | -43.1 | |
(Sanyo) | 6.9 | 7.2 | 7.0 | 7.2 | -0.1 | -0.8 | ||
(OVAKO) | 5.1 | 6.8 | 8.9 | 10.4 | -3.9 | -43.2 | ||
(SSMI) | 0.3 | 2.8 | -0.2 | - | +0.5 | - | ||
(Amortization of goodwill) | -1.6 | - | -1.4 | - | -0.2 | - | ||
Net Income | *1 | 5.2 | 2.8 | 9.9 | 5.1 | -4.6 | -47.0 | |
Net Income | 6.8 | 3.7 | 11.3 | 5.8 | -4.5 | -39.6 | ||
before amortization of goodwill | ||||||||
Sales Volume (Thousand tons) | 739 | (per month) 123.2 | 812 | (per month) 135.3 | -73 | (per month) -12.1 | ||
(Sanyo) | 427 | 71.2 | 458 | 76.3 | -30 | -5.0 | ||
(OVAKO) | 256 | 42.6 | 303 | 50.5 | -48 | -7.9 | ||
(SSMI) | 56 | 9.4 | 51 | 8.5 | +5 | +0.8 |
*1 Profit attributable to owners of parent | *2 The consolidated accounting period for SSMI is Jan. to Jun. |
© 2023 Sanyo Special Steel Co., Ltd. All Rights Reserved. | 4 |
Business Results
Business Environment
Demand
Trends
Raw Material and Fuel Prices
Although shortage of semiconductors have resolved, recovery of auto production is still gradual. Demand for construction and industrial machineries has remained stagnant. Economic uncertainty in Europe and continuous deceleration of Chinese economy is becoming a concern.
Prices trend of raw material, such as iron scrap and fuel, remains still to be robust and inflation on other materials has also emerged. Energy prices will bottom out and may slightly rebound in FY2023/2H.
1.Volume of order booked (Specialty steel products)
(Thousand tons) | Source: The Japan Iron and Steel Federation |
6,000 | Exports | Domestic | Year-on-year rate | 200% |
5,000 | 150% | |||
4,000 | 100% | |||
3,000 | 50% | |||
2,000 | 0% | |||
1,000 | -50% | |||
0 | -100% |
* FY2023/2Q: Sanyo calculated at 1.5 times the total of Jul. and Aug.
2.Units of automobile sales
(Thousand units) | Source: MarkLines Co., Ltd., ACEA |
25,000 | Japan | India | Europe(EU+UK) | 150% |
20,000 | U.S. | China | Year-on-year rate | 100% |
15,000 | 50% | |||
10,000 | 0% | |||
5,000 | -50% | |||
0 | -100% |
3. Raw Material and Fuel Prices (FY2020/1Q=100)
350 | Scrap iron (market) |
Chromium | ||
300 | Nickel | 297 |
Electricity | ||
283 | ||
LNG | ||
264 | ||
250 | 245 |
231 227
200 | 186 | 211 |
150 | 154 |
129 | |
100
* Based on purchase price
50
© 2023 Sanyo Special Steel Co., Ltd. All Rights Reserved. | 5 |
Business Forecast
Business Forecast for FY2023 (announced on October 31, 2023)
Ordinary Income in FY2023 Forecast : 20.0 billion yen (Same level as previous forecast)
・FY2023/1H result was in line with previous forecast, although sales volume was lower than forecast.
・Sales volume in FY2023/2H, excluding OVAKO's seasonal factors, is expected to be in same level as FY2023/1H, due to continued supply chain adjustments in the construction and industrial machinery industries, uncertainty of European economy and deceleration of Chinese economy, despite gradual improvements in global automobile industry.
・We intend to achieve same level of ordinary income as previous forecast mainly by implementing cost control and reduction measures.
(Reference) Sales Volume (Thousand tons/Q)
392 | 347 | 385 | 411 | |||||||||
27 | 30 | 30 | 36 | |||||||||
159 | ||||||||||||
152 | 103* | 145 | ||||||||||
213 | 215 | 210 | 216 | |||||||||
FY2023/1Q | FY2023/2Q | FY2023/3Q | FY2023/4Q | |||||||||
Foercast | Foercast | |||||||||||
SSMI | OVAKO | Sanyo | ||||||||||
- Impact of OVAKO's seasonal factors
(Unit: Billion yen)
Revised Forecast (A) | Previous Forecast (B) | Change | |||||||||
(Announced on Oct. 31, 2023) | (Announced on Jul. 28, 2023) | (B) → (A) | |||||||||
1H Result | 2H | FY | 1H | 2H | FY | 1H | 2H | FY | |||
Net Sales | 185.3 | 194.7 | 380.0 | 185.0 | 201.0 | 386.0 | +0.3 | -6.3 | -6.0 | ||
Operating Income | 7.3 | 12.7 | 20.0 | 7.5 | 12.5 | 20.0 | -0.2 | +0.2 | - | ||
Ordinary Income | 7.8 | 12.2 | 20.0 | 8.0 | 12.0 | 20.0 | -0.2 | +0.2 | - | ||
(Sanyo) | 6.9 | 6.4 | 13.3 | 7.0 | 8.0 | 15.0 | -0.1 | -1.6 | -1.7 | ||
(OVAKO) | 5.1 | 5.9 | 11.0 | 4.7 | 5.3 | 10.0 | +0.4 | +0.6 | +1.0 | ||
(SSMI) | 0.3 | 0.4 | 0.7 | 0.3 | 0.4 | 0.7 | - | - | - | ||
(Amortization of goodwill) | -1.6 | -1.6 | -3.2 | -1.6 | -1.6 | -3.1 | - | - | -0.1 | ||
Net Income*1 | 5.2 | 8.8 | 14.0 | 5.0 | 9.0 | 14.0 | +0.2 | -0.2 | - | ||
ROE (%) | 6.3 | 6.4 | -0.1 | ||||||||
Net Income | 6.8 | 10.4 | 17.2 | 6.5 | 10.6 | 17.1 | +0.3 | -0.2 | +0.1 | ||
before amortization of goodwill | |||||||||||
ROE (%) | 7.8 | 7.8 | - | ||||||||
*1 Profit attributable to owners of parent | Major assumptions after October 2023 | ||||||||||
*2 The consolidated accounting period for SSMI is Jan. to Dec. | ・Scrap iron 50,000 yen/t (H2 market price in Himeji area) | ||||||||||
・Crude oil (Dubai) 90$/BL ・Exchange rate 145 yen/US$, 154 yen/€ |
© 2023 Sanyo Special Steel Co., Ltd. All Rights Reserved. | 6 |
Interim Dividend and Dividend Forecast for FY2023 | Business Forecast | ||||||||||||
(announced on October 31, 2023) | |||||||||||||
Previous Forecast (B) | |||||||||||||
Revised Forecast (A) | Change | ||||||||||||
(Announced on Oct. 31, 2023) | (Announced on Jul. 28, 2023) | (B) → (A) | |||||||||||
1H Result | 2H Forecast | FY | 1H | 2H | FY | 1H | 2H | FY | |||||
Earnings Per Share | A | Yen/share | 96.1 | 257.0 | 91.8 | 257.0 | +4.3 | - | |||||
Earnings Per Share | |||||||||||||
before amortization | B | Yen/share | 125.3 | 315.7 | 119.3 | 313.8 | +6.0 | +1.9 | |||||
of goodwill | |||||||||||||
Dividend | C | Yen/share | 35.0 | 65.0 | 100.0 | 35.0 | 65.0 | 100.0 | - | - | - | ||
Payout Ratio | C/A | % | 36.4 | 38.9 | 38.1 | 38.9 | -1.7 | - | |||||
C/B | % | 27.9 | 31.7 | 29.3 | 31.9 | -1.4 | -0.2 | ||||||
125
100
75
50
25
0
Record high dividend | |||||||||||||||
for full year | |||||||||||||||
Year-end dividend (Yen/share) | Interim dividend (Yen/share) | 90.0 | 100.0 | 100.0 | |||||||||||
60.0 | 62.5 | 58.5 | 69.0 | 45.0 | |||||||||||
50.0 | 45.0 | 65.0 | |||||||||||||
24.0 | |||||||||||||||
25.0 | 30.0 | 37.5 | 25.0 | ||||||||||||
35.0 | 15.5 | ||||||||||||||
10.0 | 10.0 | 30.0 | 25.0 | 33.5 | 45.0 | 0.0 | 45.0 | 55.0 | 35.0 | ||||||
10.0 | 15.0 | 15.0 | 15.5 | ||||||||||||
FY2012 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 | FY2021 | FY2022 | FY2023 | ||||
Forecast |
<Dividend Policy>
Comprehensively considering dividend payout ratio, dividend per share and necessary funds for
future investment, etc.
Consolidated dividend payout ratio:(In principle) approx. 35%,
(Excluding goodwill amortization) approx. 30%
© 2023 Sanyo Special Steel Co., Ltd. All Rights Reserved. | 7 |
2. Achieving Carbon Neutrality (CN)
by 2050
Achieving CN
Sanyo's Roadmap to Carbon Neutrality by 2050
【CO₂ emissions of Sanyo*】 | Steady | ||||||
FY2013 | 2018 2019 2020 2021 2022 2023 | progress | FY2030 | FY2050 | |||
(Plan) | Approx. 15% | 50% or more reduction | Carbon Neutrality | ||||
reduction by | |||||||
0.84 | -process", etc. | in CO2 emissions | |||||
0.77 | (VS. FY2013) | ||||||
0.57 | 0.71 | Approx. 35% reduction by | Further promotion of "Eco-process" | ||||
0.49 | 0.54 | "Green energy utilization" | Utilization of cost-effective "Green energy" | ||||
0.42 | |||||||
Utilization of CCUS, etc. |
(Million tons) | Contribution to CO2 reduction |
through "Eco-products" and | |
"Eco-solutions" |
In FY2030, contribution to CO2 reduction equivalent to approx.
40% of emissions in FY2013
(previously 20%)
Achieving zero emissions
- Scope1+Scope2 of Sanyo
- Calculated from the green house gas emissions factors of contracting electric power companies.
Energy-saving heating furnace that uses regenerative burners
Eco-process
Company-wideenergy-saving measures mainly in production
Development of manufacturing technology to improve energy efficiency
*Introduced internal carbon pricing from FY2023.
Green energy utilization
Utilization of carbon free electricity/fuels and natural energy
*Commenced to utilize renewable energy sources from FY2022.
Developing long-life bearing steel for wind power generation
Eco-products
Promoting R&D and supply of special steel products that contribute to reducing CO2 emissions in the supply chain and final usage
Eco-solutions
Sharing our energy-saving technologies and productivity improvements among all Sanyo Group members including OVAKO and SSMI
Sharing technologies among group members
© 2023 Sanyo Special Steel Co., Ltd. All Rights Reserved. | 9 |
Achieving CN
Initiative for Green Energy Utilization
1.Inauguration of the fossil-free hydrogen plant in OVAKO
(Announced on September 7, 2023)
On September 5, 2023, OVAKO inaugurated fossil-free hydrogen plant constructed at Hofors mill in Sweden and held a ceremony in presence of the Honorable Swedish Prime Minister Ulf Kristersson and many other prominent guests.
Fossil-free hydrogen plant in OVAKO
This plant will generate approx. 4,000 cubic meters of fossil-free hydrogen per hour through electrolysis of water using fossil-freeelectricity.
The conversion to hydrogen will enable OVAKO to reduce Hofors mill's CO₂ emissions from the process of re-heatingsteel before rolling by 50 percent (approx. 20,000 t/year).
The new fossil-free hydrogen plant is one of the largest facilities in Europe, accomplished with support of the Swedish Energy Agency and collaboration with local key players such as Volvo Group, Hitachi Energy, H2 Green Steel, and Nel Hydrogen.
OVAKO will consider to actively implement local hydrogen production in all business units and will promote initiatives to mitigate climate change.
Electrolyzer of Hydrogen plant of OVAKO
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Sanyo Special Steel Co. Ltd. published this content on 31 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 October 2023 04:50:11 UTC.