26 March 2013 07:34 [Source: ICIS news]
SINGAPORE (ICIS)--Ratings firm Moody’s on Tuesday changed its “A3” long-term issuer rating outlook for Japanese fibres maker Teijin Ltd to “negative”, from “stable”, amid deteriorating demand.
Teijin’s operating performance has been under pressure as a result of weak global demand, particularly in Europe, and intensifying competition, Moody’s said in a statement.
Its major products such as aramid fibres, polycarbonate (PC) resin for electrical and electronic applications as well as films have been hit by this trend, according to the ratings firm.
“In particular, sales and earnings of aramid fibres, which used to generate stable earnings, are likely to remain sluggish, due to weak demand for ballistic protection products and protective clothing,” Moody’s said.
Teijin’s healthcare unit is also experiencing a decline in earnings, as the competition for osteoporosis treatments, one of its core areas, remains intense, the firm added.
While Teijin's healthcare segment has consistently contributed to earnings, its operating income is expected to deteriorate by 3% year on year to yen (Y) 25bn ($266m) in the current fiscal year that will end in March, according to Moody’s.
Given the challenging operating environment during the fiscal year ending March 2013, Teijin expects to report a 13% year-on-year decline in sales to Y740bn and about a 60% decline in overall operating income to Y14bn.
($1 = Y94.1)
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