Company name: Ube Industries, Ltd. Representative: Yuzuru Yamamoto,
November 1, 2016
President and Representative Director Security code: 4208 (shares listed on First Section of Tokyo
Stock Exchange and Fukuoka Stock Exchange)
URL: http://www.ube.co.jp/
Contact: Shinsuke Tokumitsu, General Manager,
IR/PR Department Tel: +81-3-5419-6110
(Amounts rounded to the nearest million yen)
-
Consolidated Financial Results for the First Half Ended September 30, 2016
(From April 1, 2016 to September 30, 2016)
(Note) Comprehensive Income:
1H Ended Sept. 30, 2016:
-3,606 Million Yen ( - %)
1H Ended Sept. 30, 2015:
7,446 Million Yen ( 102.3 %)
-
Consolidated Operating Results (% Indicates the rate of increase/decrease to the same period of previous year)
Net Sales
Operating Income
Ordinary Income
Profit Attributable to Owners of Parent
1H ended Sept. 30, 2016
281,071 -13.1%
11,515 -43.8%
10,319 -47.5%
7,106 -48.2%
1H ended Sept. 30, 2015
323,263 5.0%
20,502 230.2%
19,653 303.0%
13,713 -
Net Income per Share(Yen)
Diluted Net Income per Share(Yen)
1H ended Sept. 30, 2016
1H ended Sept. 30, 2015
6.71
12.96
6.69
12.92
-
Consolidated Financial Position
Total Assets
Net Assets
Equity Ratio
As of Sept. 30, 2016
As of March 31, 2016
653,545
679,783
280,008
289,622
39.6%
39.2%
(Reference) Equity Capital: As of Sept. 30, 2016: 259,090 Million Yen /As of March 31, 2016: 266,562 Million Yen [Equity Capital = Net assets - Subscription rights to shares - Non-controlling interests]
-
Cash Dividends
Cash Dividends per share (yen)
First Quarter
Second Quarter
Third Quarter
Year End
Annual
Year Ended March 31, 2016
Year Ending March 31, 2017
-
-
0.00
0.00
-
5.00
5.00
Year Ending March 31, 2017 (Forecast)
-
6.00
6.00
-
Forecast of Consolidated Financial Results for the Fiscal Year Ending March 31, 2017
(From April 1, 2016 to March 31, 2017)
(% Indicates the rate of increase/decrease year on year)
Net Sales
Operating Income
Ordinary Income
Profit Attributable to Owners of Parent
Net Income per Share(Yen)
Year Ending March 31, 2017
610,000
-4.9%
35,000
‐15.5%
33,000
‐16.7%
20,000
4.7%
18.90
- Number of shares outstanding (common stock)
As of Sept. 30, 2016
As of March 31, 2016
Numbers of shares outstanding at period end
1,062,001,076
1,062,001,076
Numbers of shares of treasury stock at period end
3,469,516
3,813,962
1H ended Sept. 30, 2016
1H ended Sept. 30, 2015
Weighted-average number o shares outstanding over period
1,058,385,885
1,058,007,891
Qualitative Information on Quarterly Results
Analysis of Operating Results
During the current term, the U.S. economy sustained recovery and the European economy continued to be on a track of modest recovery, but the slowing of the Chinese economy became more apparent in Asia; as a whole, the world economy continued modest recovery, although such recovery lacked strength. The overall Japanese economy continued to be on a track of modest recovery, but individual spending and performance in the private sector remained sluggish.
Under such circumstances, the Company Group has announced "Change & Challenge 2018," the three-year midterm plan for the next three years starting from this fiscal year. Based on the basic policies of the new midterm plan, such as "Strengthen the Business Foundation to Enable Sustainable Growth"
and "Address and be Part of the Solution for Resource, Energy, and Global Environmental Issue," we will make full efforts to enhance profitability of each business segment and to overcome business challenges one by one. During the current term, business performance of the Company Group was affected by various factors such as rapid appreciation of the yen, sluggish market conditions of caprolactam, and weak demand and worsened export environment in the Japanese cement market. In addition, we conducted periodic inspection of the ammonia product factory in Ube for which the inspection frequency was shifted to every two year last year, as well as periodic inspection of the privately-owned power plant,
both of which also impacted our business result.
(Billions of Yen)
Net Sales
Operating Income
Ordinary Income
Profit Attributable to Owners of Parent
1H 2016
281.0
11.5
10.3
7.1
1H 2015
323.2
20.5
19.6
13.7
Change
-13.1%
-43.8%
-47.5%
-48.2%
The overall conditions of the Group by segment are as follows.
Chemicals Segment
Shipment of both polyamide resins and polybutadiene rubber (synthetic rubber) was steady as a whole, because of a steady increase in sales of the products respectively used for food wrap films and eco tires. On the other hand, the market prices of the products remained low due to some factors represented by the appreciation of yen. Price falls of auxiliary materials such as ammonia contributed to overseas business of caprolactam, which is a material used for synthesize polyamide, but, in spite of some signs of recovery, the market prices were still low due to the continued supply excess in the China market.
Shipment of ammonia products was weak, due to periodic inspection of the factory.
Shipment of both separators and electrolyte for lithium-ion batteries increased, thanks to application on vehicles such as eco-cars Shipment of polyimide films was weak. Shipment of fine chemicals continued to be steady as a whole, but was affected by the appreciation of yen.
(Billions of Yen)
Net Sales
Operating Income
1H 2016
117.9
0.4
1H 2015
136.9
6.3
Change
-13.9%
-92.9%
Pharmaceutical Segment
Shipment of pharmaceutical products may vary from quarter to quarter, but that of active ingredients respectively for hypotensive agents, antiallergic drugs and antiplatelet agents developed by UBE in the current term increased in comparison with the same period in the previous year. Shipment of active ingredients and intermediates for drugs manufactured under contract was steady as a whole.
(Billions of Yen)
Net Sales
Operating Income
1H 2016
4.5
1.1
1H 2015
3.2
0.2
Change
38.7%
415.1%
Cement & Construction Materials Segment
Domestic shipment of cement and ready-mixed concrete was affected by sluggish demand. Shipment of exported cement continued to be strong, but the market prices stayed relatively low. Shipment of calcia and magnesia products remained weak.
(Billions of Yen)
Net Sales
Operating Income
1H 2016
109.7
7.3
1H 2015
118.2
9.8
Change
-7.2%
-24.5%
Machinery Segment
Shipment of industrial machines such as vertical mills and conveyers was weak in both domestic and overseas markets. While shipment of molding machines mainly supplied to the automobile industries was steady in the domestic and North America markets, but the shipment to China and Southeast Asian countries was sluggish. Business performance of machinery services for those products remained at a steady level. Shipment of steel products increased in comparison with the same period in the previous year, but the price was affected by the weak market condition.
(Billions of Yen)
Net Sales
Operating Income
1H 2016
26.6
0.7
1H 2015
34.0
1.7
Change
-21.7%
-57.8%
Energy & Environment Segment
In the coal business, sales volumes of salable coal and volume of coal dealing at UBE's Coal Center (a coal storage facility) respectively decreased in comparison with the same period in the previous year. The power producer business was affected by periodic inspection of UBE's privately-owned power plant.
(Billions of Yen)
Net Sales
Operating Income
1H 2016
26.6
1.7
1H 2015
37.2
2.4
Change
-28.5%
-28.8%
Analysis of Financial Condition
Total assets at the end of the first Half of the fiscal year decreased by 26.2 billion yen, in comparison with the end of the previous fiscal year, to 653.5 billion yen, mainly because notes and accounts receivable, and cash on hand and in banks decreased respectively by 14.0 billion yen and 12.4 billion yen in spite of 4.9 billion yen increase in inventories, which include commercial products and manufactured goods.
Total liabilities decreased by 16.6 billion yen to 373.5 billion yen mainly because interest-bearing debt decreased by 12.4 billion yen.
Net assets decreased by 9.6 billion yen to 280.0 billion yen, mainly because retained earnings decreased from payment of dividends, and currency translation adjustments decreased respectively by
5.3 billion yen and 8.6 billion yen, in spite of 7.1 billion yen increase in profit attributable to owners of parent.
Forecast for the next Fiscal Year (April 1, 2016 to March 31, 2017)
Looking into future economic conditions, we expect that while Japanese economy would continue modest recovery, the global economy would experience greater uncertainty for the reasons of future fluctuation of foreign exchange rate and fuel prices, slowdown in economic growth in emerging countries including China and resource-rich countries, and changes in political, economic and financial trends in the
U.S. and European countries.
As announce on October 26, 2016, earnings of the first half of the fiscal year were higher than the initial forecast. Although, the earnings of the second half of the fiscal year are projected to be lower than the initial forecast due to increasingly severe business conditions. For the full-year forecasts, the company projects net sales of 610.0 billion yen, operating income of 35.0 billion yen, ordinary income of 33.0 billion yen and net income of 20.0 billion yen.
Consolidated Financial Statements
Consolidated Balance Sheets
Assets
Current assets
(Millions of Yen) As of March 31, 2016 As of September 30, 2016
Cash and deposits
42,463
30,007
Notes and accounts receivable - trade
139,506
125,459
Merchandise and finished goods
34,389
33,668
Work in process
15,360
21,590
Raw materials and supplies
26,334
25,746
Other
19,510
20,780
Allowance for doubtful accounts
‐637
‐470
Total current assets
276,925
256,780
Non-current assets
Property, plant and equipment
Buildings and structures, net
81,176
81,835
Machinery, equipment and vehicles, net
141,086
134,623
Land
84,468
84,228
Other, net
17,070
18,005
Total property, plant and equipment
323,800
318,691
Intangible assets
Other
4,970
4,535
Total intangible assets
4,970
4,535
Investments and other assets
Investment securities
48,167
46,672
Other
26,345
27,288
Allowance for doubtful accounts
‐538
‐507
Total investments and other assets
73,974
73,453
Total non-current assets
402,744
396,679
Deferred assets
114
86
Total assets
679,783
653,545
Liabilities
Current liabilities
(Millions of Yen) As of March 31, 2016 As of September 30, 2016
Notes and accounts payable - trade
74,280
78,809
Short-term loans payable
79,367
67,635
Commercial papers
-
5,000
Current portion of bonds
15,020
30,020
Income taxes payable
6,766
3,870
Provision for bonuses
7,118
7,063
Other provision
963
908
Other
49,742
42,777
Total current liabilities
233,256
236,082
Non-current liabilities
Bonds payable
45,030
30,020
Long-term loans payable
75,839
69,727
Provision
1,231
1,058
Net defined benefit liability
6,727
6,805
Negative goodwill
958
947
Asset retirement obligations
1,271
1,682
Other
25,849
27,216
Total non-current liabilities
156,905
137,455
Total liabilities
390,161
373,537
Net assets
Shareholders' equity
Capital stock
58,435
58,435
Capital surplus
38,536
37,980
Retained earnings
166,862
168,668
Treasury shares
‐801
‐705
Total shareholders' equity
263,032
264,378
Accumulated other comprehensive income Valuation difference on available-for-sale
securities
Deferred gains or losses on hedges
‐13
‐9
Foreign currency translation adjustment
3,674
‐4,934
Remeasurements of defined benefit plans
‐3,645
‐3,344
3,514 2,999
Total accumulated other comprehensive
income 3,530 ‐5,288
Subscription rights to shares
597
625
Non-controlling interests
22,463
20,293
Total net assets
289,622
280,008
Total liabilities and net assets
679,783
653,545
Consolidated Statements of Income / Consolidated Statements of Comprehensive Income
・Consolidated Statements of Income
Previous First Half ended September 30, 2015
(Millions of Yen)
Current First Half ended September 30, 2016
Net sales 323,263 281,071
Cost of sales 262,646 230,798
Gross profit 60,617 50,273
Selling, general and administrative expenses 40,115 38,758
Operating income 20,502 11,515
Non-operating income
Interest income 156 100
Dividend income 420 532
Rent income 632 624
Amortization of negative goodwill 65 68
Share of profit of entities accounted for using equity method
1,553 905
Other 1,189 958
Total non-operating income 4,015 3,187 Non-operating expenses
Interest expenses 1,059 791
Rent expenses 358 371
Foreign exchange losses 643 906
Other 2,804 2,315
Total non-operating expenses 4,864 4,383
Ordinary income 19,653 10,319
Extraordinary income
Gain on sales of non-current assets 5 56
Gain on sales of investment securities 40 -
Reversal of accrued expenses from business
withdrawal 1,596-
Total extraordinary income 1,641 56
Extraordinary losses
Loss on disposal of non-current assets
845
518
Impairment loss
114
27
Loss on valuation of investment securities
356
-
Provision for loss over investment cost of subsidiaries and affiliates
404
-
Total extraordinary losses
1,719
545
Profit before income taxes
19,575
9,830
Income taxes
5,762
3,354
Profit
13,813
6,476
Profit (loss) attributable to non-controlling interests
100
‐630
Profit attributable to owners of parent
13,713
7,106
・Consolidated Statements of Comprehensive Income
Previous First Half ended September 30, 2015
(Millions of Yen) Current First Half ended
September 30, 2016
Profit 13,813 6,476
Other comprehensive income
Valuation difference on available-for-sale
securities ‐115 ‐530
Deferred gains or losses on hedges 63 4
Foreign currency translation adjustment ‐6,585 ‐8,952 Remeasurements of defined benefit plans, net
of tax 215 291
Share of other comprehensive income of entities accounted for using equity method
55 ‐895
Total other comprehensive income ‐6,367 ‐10,082
Comprehensive income 7,446 ‐3,606 Comprehensive income attributable to owners
of parent 9,207 ‐1,712
Comprehensive income attributable to non-
controlling interests ‐1,761 ‐1,894
Consolidated Statements of Cash Flows
Cash flows from operating activities
Previous First Half ended September 30, 2015
(Millions of Yen) Current First Half ended
September 30, 2016
Profit before income taxes 19,575 9,830
Depreciation 17,764 16,871
Impairment loss 114 27
Amortization of negative goodwill ‐65 ‐68 Increase (decrease) in allowance for doubtful
accounts
Interest and dividend income
‐576
‐632
Interest expenses
1,059
791
Foreign exchange losses (gains)
613
‐14
‐27 ‐161
Share of (profit) loss of entities accounted for
using equity method ‐1,553 ‐905
Provision for loss over investment cost of subsidiaries and affiliates
Reversal of accrued expenses from business
404 -
withdrawal ‐1,596 -
Loss (gain) on sales of non-current assets 48 ‐62 Decrease (increase) in notes and accounts
receivable - trade 14,56211,971
Decrease (increase) in inventories ‐11,327 ‐6,988 Increase (decrease) in notes and accounts
payable - trade
Other, net
998
‐2,561
Subtotal
32,356
32,393
Interest and dividend income received
993
1,399
Interest expenses paid
‐1,066
‐792
Income taxes paid
‐4,240
‐6,987
‐7,637 4,294
Net cash provided by (used in) operating
activities 28,043 26,013
Cash flows from investing activities
Purchase of property, plant and equipment and
intangible assets ‐17,054 ‐18,995
Proceeds from sales of property, plant and equipment
373 90
Purchase of investment securities ‐1 ‐44
Proceeds from sales of investment securities 58 122
Purchase of shares of subsidiaries and
associates ‐16 ‐395
Proceeds from sales of shares of subsidiaries and associates
Decrease (increase) in short-term loans
51 56
receivable 315
Other, net ‐259 462
Net cash provided by (used in) investing
activities ‐16,845 ‐18,689
Cash flows from financing activities
Net increase (decrease) in short-term loans
payable
Increase (decrease) in commercial papers
0
5,000
Proceeds from long-term loans payable
1,549
4,421
Repayments of long-term loans payable
‐14,883
‐11,812
Redemption of bonds
‐10
‐10
497 ‐9,154
Proceeds from share issuance to non- controlling shareholders
- 465
Cash dividends paid ‐5,280 ‐5,281
Dividends paid to non-controlling interests ‐306 ‐354
Payments from changes in ownership interests in subsidiaries that do not result in change in scope of consolidation
- ‐870
Other, net ‐457 ‐423
Net cash provided by (used in) financing
activities ‐18,890 ‐18,018
Effect of exchange rate change on cash and cash
equivalents ‐192 ‐1,236
Net increase (decrease) in cash and cash
equivalents ‐7,884 ‐11,930
Cash and cash equivalents at beginning of period 36,964 41,188 Increase (decrease) in cash and cash equivalents
resulting from change of scope of consolidation 906-
Cash and cash equivalents at end of period 29,986 29,258
(References)Information concerning Net Sales and Income or Loss by Reportable Business Segment
Previous First Half ended September 30, 2015 (April 1, 2015 to September 30, 2015) (Millions of Yen)
Reported Segment
Adjustment
(note)
Amount recorded in consolidated financial statement
Chemicals
Pharma- ceuticals
Cement & Construction Materials
Machinery
Energy & Environment
Others
Total
Net Sales
133,065
3,266
114,926
33,749
30,448
7,809
323,263
-
323,263
External sales
Internal sales or transfers
3,913
-
3,289
310
6,843
978
15,333
-15,333
-
Total
136,978
3,266
118,215
34,059
37,291
8,787
338,596
-15,333
323,263
Segment income or losses (-) (operating income or losses (-))
6,390
219
9,801
1,798
2,406
432
21,046
-544
20,502
(Note ) -544 million yen for adjustment for segment income or loss (-) includes -42 million yen for the elimination of transaction between the Segments and -502 million yen for company-wide cost that is not allocated to each reported Segment. Company-wide cost consists mainly of administration and general expense that are not attributed to each reported Segment.
Current First Half ended September 30, 2016 (April 1, 2016 to September 30, 2016) (Millions of Yen)
Reported Segment
Adjustment
(note)
Amount recorded in consolidated financial statement
Chemicals
Pharma- ceuticals
Cement & Construction Materials
Machinery
Energy & Environment
Others
Total
Net Sales
115,171
4,531
107,144
26,335
21,893
5,997
281,071
-
281,071
External sales
Internal sales or transfers
2,804
-
2,579
335
4,782
1,052
11,552
-11,552
-
Total
117,975
4,531
109,723
26,670
26,675
7,049
292,623
-11,552
281,071
Segment income or losses (-) (operating income or losses (-))
454
1,128
7,399
759
1,714
254
11,708
-193
11,515
(Note) -193 million yen for adjustment for segment income or loss (-) includes -37 million yen for the elimination of transaction between the Segments and -156 million yen for company-wide cost that is not allocated to each reported Segment. Company-wide cost consists mainly of administration and general expense that are not attributed to each reported Segment.
Consolidated Key Indicators (Billions of Yen - except where noted)
Previous First Half ended September 30,
2015
Current First Half ended September 30,
2016
Fiscal Year ending
March 31, 2017 (forecast)
Fiscal Year Ended
March 31, 2016
Capital investment
13.7
18.3
48.0
34.4
Depreciation and amortization
17.7
16.8
35.0
35.5
Research and development expenses
6.5
6.5
14.5
13.7
Adjusted operating income *1
22.6
13.0
380
45.2
Interest-bearing debt
228.9
204.2
207.0
216.6
Equity capital*2
267.4
259.0
272.0
266.5
Total assets
694.5
653.5
680.0
679.7
D/E ratio (times)
0.86
0.79
0.76
0.81
Equity ratio (%)
38.5
39.6
40.0
39.2
Return on sales (%)
6.3
4.1
5.7
6.5
Return on assets - ROA (%) *3
-
-
5.6
6.5
Return on equity - ROE (%)
-
-
7.4
7.2
Number of employees
10,819
10,841
11,000
10,764
*1 Adjusted operating income: Operating income + Interest and dividend income +Share of profit of entities accounted for using equity method
*2 Equity capital: Net assets - Subscription rights to shares - Non-controlling interests
*3 ROA: Adjusted operating income / Average total assets
TopicsChemical Segment -
Ube Industries, Ltd. decided to expand production capacity of large-grain ammonium sulfate and entered into an agreement with the National Federation of Agricultural Cooperative Association for establishment of a joint corporation to distribute and manage ammonium sulfate. (April 2016)
Ube Industries, Ltd., JSR Corporation , and Mitsubishi Rayon Co., Ltd. reached basic agreement for merger of
subsidiaries in ABS resin business. (May 2016)
Ube Industries, Ltd. opened "Osaka Research and Development Center." (July 2016)
Ube Industries Ltd. will expand production capacity for lithium-ion battery separators. (September 2016)
Cement & Construction Materials Segment -
Ube Industries, Ltd. transferred its sales and logistic functions of the limestone-related business to Ube Material Industries, Ltd. (April 2016)
Ube Industries, Ltd. launched "Tough Leveler G+," self-leveling materials using high-performance cement. (June 2016)
Machinery Segment -
Ube Machinery Corporation, Ltd. launched "UB-iS3 Series," its new medium-sized die-cast machine series. (May 2016)
Ube Machinery Corporation, Ltd. decided to purchase shares in Mitsubishi Heavy Industries Plastic Technology Co.,
Ltd. for acquisition of the management right. (July 2016)
Ube Machinery Inc. established its sales and servicing office in Kentucky, USA. (August 2016)
Ube Industries Ltd. published this content on 01 November 2016 and is solely responsible for the information contained herein.
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