For the half-year ended on September 30, 2021, the Sumitomo Chemical Group reported consolidated sales revenue of ¥1,325.2 billion, an increase of ¥278.4 billion year on year, core operating income of ¥148.9 billion, operating income of ¥144.3 billion, and net income attributable to owners of the parent of ¥88.9 billion, all higher than the results from the same period of the previous year. Company has decided to pay an interim dividend of ¥10 per share.

 

Based on recent performance trends, the company has made revisions to its consolidated financial forecast for the full-year ending March 31. Sales revenue and core operating income are expected to exceed the previously announced forecast mainly because the margins of products in the Petrochemical & Plastics Sector have improved due to higher market prices, and shipments of products in the IT-related Chemicals Sector have been solid in the first-half of this fiscal year. 

 

In FY 2021, the company's revised forecast indicates, sales revenue of ¥2,710 billion, core operating income of ¥245 billion, operating income of ¥225 billion, and net income attributable to owners of the parent of ¥140 billion.

 

The financial results by business segment for the half-year are as follows:

 

Market prices of petrochemical products, synthetic resins and synthetic fibers increased due to recovery of demand and an increase in raw material prices. Margins also improved. Therefore, sales revenue increased by ¥155.9 billion, to ¥399.5 billion, and core operating income recovered by ¥73.3 billion, to ¥42.0 billion, compared with the same period of the previous year, when the shipment volumes decreased due to the periodic shutdown maintenance for Rabigh Refining and Petrochemical Company, our equity method investee, and due to the impact of the COVID-19 pandemic, mainly on demand for automotive use.

 

Shipments of separators for lithium-ion secondary batteries performed well. Market prices for aluminum and for the metal raw materials for cathode materials increased, resulting in higher selling prices. For the same period of the previous year, shipments were lower, mainly for automotive use, due to the COVID-19 pandemic. As a result, sales revenue increased by ¥43.2 billion from the same period of the previous year, to ¥148.5 billion. Core operating income increased by ¥7.8 billion from the same period of the previous year, to ¥12.6 billion.

 

Shipments of processing materials for semiconductors (including high purity chemicals and photoresists) increased, driven by growing demand for these items. Shipments of materials for display applications increased in the face of stay-at-home demand, and telework demand continued from the previous year. As a result, sales revenue increased by ¥14.4 billion from the same period of the previous year, to ¥227.7 billion, and core operating income increased by ¥7.4 billion from the same period of the previous year, to ¥29.5 billion.

 

Shipments of crop protection products in North America, South America and India stayed firm. Market prices of methionine (feed additives) increased from the same period of the previous year. As a result, sales revenue increased by ¥23.4 billion from the same period of the previous year, to ¥209.4 billion. Core operating income increased by ¥9.1 billion from the same period of the previous year, to ¥18.5 billion.

 

In North America, Orgovyx (therapeutic agent for advanced prostate cancer), which was launched in the previous fiscal year, and Gemtesa (therapeutic agent for overactive bladder) and Myfembree (therapeutic agent for uterine fibroids), both of which commenced sales in the last quarter, as well as the recording of a lump-sum upfront payment for a development and commercial collaboration and license agreement, contributed to sales revenue. These more than offset negative impacts, such as declines in sales of Latuda (atypical antipsychotic agent) and Brovana (therapeutic agent for chronic obstructive pulmonary disease), the latter of which saw its exclusive marketing period expire. On the other hand, in Japan, sales revenues were adversely affected by the National Health Insurance (NHI) drug price revisions. As a result, sales revenue increased by ¥33.4 billion from the same period of the previous year, to ¥309.6 billion. Core operating income increased by ¥0.9 billion from the previous year, to ¥50.0 billion, because of the increase of sales revenue, though selling, general and administrative expenses increased due to the start of full-scale marketing activities by subsidiaries of Sumitovant Biopharma Limited.