Asahi Kasei Q3 op profit falls 1.1%

02 February 2006 06:57  [Source: ICIS news]

SINGAPORE (ICIS news)--Asahi Kasei Chemicals, one of Japan's largest petrochemical companies, said on Thursday that its fiscal third quarter operating profits fell 1.1% on higher raw material costs.

The company’s operating profit fell to Yen34.2bn ($288.8m/Euro239.8m) in the quarter ended 31 December, down from Yen34.5bn a year earlier. The cost of naphtha, feedstock for Asahi Kasei’s 500,000 tonne/year cracker at Mizushima, Okayama Prefecture, jumped 35.1% during the same period to Yen47,300/tonne, the company said.

Net sales, however, grew 5.6% to Yen372.3bn while the sales for its chemicals division grew 20.6% to Yen171.3bn as market conditions for acrylonitrile (ACN) improved. Total net profit was 6.8% higher at Yen21.2bn. Strong overseas demand for its engineering plastics boosted profits, though poor market conditions for styrene monomer (SM) were a drag, said the company.

The company’s pharmaceutical sales rose 0.8% to Yen27.4bn in the last three months of 2005. Sales for fibres dipped 1.7% to Yen22bn due to rising feedstock prices for non-wovens and lower export prices for its elastic polyurethane filament.

For the nine months ending 31 December 2005, the company’s operating profit fell 8.9% to Yen81.6bn compared with a year earlier. Its net income declined 0.3% to Yen46.6bn, but sales grew 7.8% to Yen1.1trn.

Asahi Kasei forecast that its net profit for fiscal 2005 would rise 4.4% to Yen59bn and sales would grow 8.9% to Yen1.5trn. Operating profit is expected to fall 9.3% to Yen105bn.

The company decided last November to bring on stream a 10,000 tonne/year hexamethylene diisocyanate (HDI) plant in Nantong, Jiangsu Province, China, in 2007. It will also license its cyclohexanol technology to Shijiazhuang Coking and Chemical. It will also expand the capacity of its polyphenylene-ether (PPE) plant at Jurong Island, Singapore by 30% to 39,000 tonne/year by July 2006.

By: Florence Tan
+65 6780 4359

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