Japan’s Showa Denko swings to 2020 loss as petrochemical profit slumps

SINGAPORE (ICIS)–Japan’s Showa Denko has incurred a full-year 2020 net loss of yen (Y) 76.3bn ($720m), reversing the profit in 2019, while earnings from its petrochemical segment slumped amid the coronavirus pandemic.

in billion yen (Y)	2020	2019	% change
Net sales	973.7	906.5	7
Operating income	(19.4)	120.8	–
Net income	(76.3)	73.1	–
Petrochemical net sales	193.4	250.7	(23)
Petrochemical operating income	4.9	17.2	(72)

Olefins market prices had declined along with crude oil and naphtha values, while the supply-demand balance in east Asia softened in the first quarter, caused by a slowdown in the Chinese economy, it said.

Petrochemical earnings plunged “due mainly to a remaining impact of the negative spread between purchase and shipment prices of raw naphtha inventory caused by a fall in raw naphtha price”, it added.

For 2021, Showa Denko expects to trim its net loss to Y14bn on the back of a projected 31.5% increase in net sales to Y1.28tr.

For petrochemicals, operating profit this year is expected to more than double to Y11.5bn, with net sales forecast to rise 1.3% to Y196bn.

($1 = Y105.9)

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