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

Author: Pearl Bantillo

2021/02/17

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)

Visit the ICIS Coronavirus topic page for analysis of the impact on chemical markets and links to latest news.