Feedstock costs hit Daicel profit forecast

31 March 1997 00:00  [Source: ACN]

DAICEL Chemical Industries has revised the forecast for its 1996 pre-tax profit downwards on the back of sluggish sales of synthetic resins and rises in raw-material costs.

Daicel predicts its 1996 pre-tax profit will reach Yen80bn (US$648m), down from earlier forecasts of Yen81.5bn.

A company official said profits will be less than originally expected because Daicel maintained sales prices even as costs rose for raw materials such as methanol and pulp.

However, the depreciation of the yen is expected to help boost profitability by 33% from Daicel's Yen60bn 1995 pre-tax profit.

Sales forecasts have also been revised down Yen2bn to Yen173bn, but are still 6% higher than the Yen165bn sales posted last year. The official said Daicel may attempt to raise sales prices in fiscal-year 1997 to accommodate raw-material price hikes.

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