Daiso 2006 op income up ECH growth, cost cuts

18 May 2007 08:38  [Source: ICIS news]

TOKYO (ICIS news)--Daiso on Friday reported a 14.5% rise in 2006 operating income due to cost cuts, price increases of various products and capacity expansions of products including epichlorohydrin (ECH) and allyl chloride.

The Japanese chemicals producer forecast its consolidated operating profit for the full fiscal year 2007 ending 31 March 2008 to increase 8% to yen (Y) 3.9bn ($31.2m), net sales to rise 7.7% to Y78bn and net income to be Y2.1bn, a 6.4% increase.

Consolidated operating income for the full year ended 31 March 2007 was Y3.6bn, up from Y3.2bn in fiscal 2005. Net sales rose 8.5% to Y72.4bn from Y66.7bn, while net income was 13.8% higher at Y2bn than Y1.7bn a year ago.

Sales of caustic soda increased due to the steadily-recovering domestic demand.

Net sales of ECH dramatically rose because demand from the epoxy resins users, the core customers, grew steadily. The price increases of ECH caused by the elevated feedstock costs also contributed to the favorable performance, the company said.

The full-year operating income in the basic chemicals segment was 37.5% higher at Y2.2bn than Y1.6bn the year before, while net sales increased 12.6% to Y38.5bn from Y34.2bn.

In the functional chemicals segment, sales of allyl ether and related products increased due to favorable exports to China, the US and Europe. Both sales volume and net sales for ECH rubber were higher than the same time a year ago, supported by the strong sales for automotive applications in Japan, China and South Korea.

However, net sales of chlorinated polyethylene decreased because exports of the product declined despite the favorable domestic performance.

The functional chemicals segment recorded a 4.5% in decrease in its full-year operating profit to Y2.1bn from Y2.2bn the previous year, while net sales increased 8.2% to Y24.2bn from Y22.4bn.

($1=Y121.28)

By: Tomomi Yokomura
+65 6780 4359

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