Tokuyama Corporation reported a decline in its first quarter earnings as well as profits. Company's net sales decreased 7.6%, or ¥5,840 million compared with the corresponding period of the previous year, to ¥ 70,624 million. Despite firm sales of semiconductor-related products, this decrease was largely attributable to the impact of the novel coronavirus (COVID-19) pandemic, which triggered a downturn in overseas caustic soda market conditions, weak petrochemical product sales prices, and lower export volumes of dental materials to Europe and the United States. 

 

Operating profit decreased 5.3%, or ¥373 million compared with the corresponding period of the previous fiscal year, to ¥ 6,653 million. Despite lower raw material and fuel costs, Despite a downturn in raw material and fuel costs, this decrease in operating profit was mainly due to the impact of COVID-19, which triggered a downturn in overseas caustic soda market conditions, and weak petrochemical product sales prices. 

 

Caustic soda earnings declined. This downturn in earnings was largely due to the drop in sales volumes in Japan owing to the spread of COVID-19 and a deterioration in overseas market conditions.

 

Vinyl chloride monomer (VCM) earnings decreased. Despite a downturn in manufacturing costs as a result of the drop in domestic naphtha prices, this decrease in earnings was mainly attributable to COVID-19, which placed downward pressure on overseas market conditions.

 

Results in vinyl chloride resin were essentially in line with the corresponding period of the previous fiscal year. While sales volumes were weak, this largely reflected the Company’s ability to maintain the spread between raw material costs and selling prices.

 

As a result of the above, segment net sales decreased 18.4% compared with the corresponding period of the previous fiscal year, to ¥19,817 million and operating profit decreased 33.1% to ¥ 2,586 million. The segment reported lower earnings on lower sales. 

 

Semiconductor-grade polycrystalline silicon results were also in line with the corresponding period of the previous fiscal year owing to firm sales on the back of the introduction of 5G and an increase in remote work.

 

Earnings from high-purity chemicals for electronic manufacturing increased. This was due to an increase in the volume mainly overseas. Both sales volumes and earnings of fumed silica at Tokuyama Chemicals (Zhejiang) Co., Ltd. decreased owing largely to trade friction between China and the United States.

 

As a result of the above, segment net sales increased 3.7% compared with the corresponding period of the previous fiscal year, to ¥12,572 million and operating profit decreased 17.4% to ¥1,321 million. The segment reported lower earnings on higher sales. 

 

The company has not revised the performance forecasts announced earlier due to uncertainty surrounding the spread of COVID-19, fluctuations in foreign exchange rates as well as raw material and fuel prices, and other factors. Further details will be disclosed in a timely manner should the need to revise performance forecasts, said the company.