(Reference Translation)
Aug 7, 2020
OSAKA SODA CO., LTD.
CONSOLIDATED FINANCIAL RESULTS
For the quarterly period ended June 30, 2020 (Prepared under Japan GAAP, unaudited)
Company name: | OSAKA SODA CO., LTD. | Stock Exchange Listing: | Tokyo | ||||||||
Securities code: | 4046 | URL: http://www.osaka-soda.co.jp | |||||||||
Representative: | Kenshi Terada, Representative Director, President & Chief Executive Officer | ||||||||||
For inquiry: | Yoshihiro Ueda, Director, General Manager, Administration Division | ||||||||||
(Telephone: +81-6-6110-1560) | |||||||||||
Scheduled date of filing of quarterly securities report: | Aug 11, 2020 | ||||||||||
Scheduled date of commencement of dividend payment: | - | ||||||||||
Supplementary materials prepared for the financial results: | None | ||||||||||
Quarterly financial results briefings: | None | ||||||||||
1. Consolidated Financial Results | (Amounts are rounded down to the nearest million yen) | ||||||||||
(1)Results of Operations | |||||||||||
Three Months Ended | |||||||||||
June 30, 2020 | June 30, 2019 | ||||||||||
Change * | Change * | ||||||||||
Net sales | Millions of yen | 23,257 | (13.0)% | 26,736 | 2.2% | ||||||
Operating income | Millions of yen | 1,947 | (26.5)% | 2,649 | 7.6% | ||||||
Ordinary income | Millions of yen | 2,165 | (23.3)% | 2,821 | (2.3)% | ||||||
Net income | Millions of yen | 1,470 | (13.2)% | 1,693 | (18.0)% | ||||||
Comprehensive income | Millions of yen | 2,577 | 82.0% | 1,415 | (13.9)% | ||||||
Net income per share | Yen | 61.96 | - | 73.02 | - | ||||||
Diluted net income per share | Yen | 55.05 | - | 63.56 | - | ||||||
(Note) Percent changes for three months are year-on-year comparisons. | |||||||||||
(2)Financial Condition | |||||||||||
June 30, 2020 | March 31, 2020 | ||||||||||
Total assets | Millions of yen | 111,431 | 110,851 | ||||||||
Net assets | Millions of yen | 70,930 | 69,121 | ||||||||
Equity | Millions of yen | 70,927 | 69,121 | ||||||||
Equity ratio | % | 63.7 | 62.4 | ||||||||
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2. Dividends
Year ending Mar. 31, 2021 | Year ended Mar. 31, 2020 | ||||
(Forecast) | Year ending Mar. 31, 2021 | ||||
End of first quarter | - | - | |||
End of second quarter | 32.50 | 32.50 | |||
End of third quarter | - | - | |||
End of fourth quarter | 32.50 | 32.50 | |||
Full year | 65.00 | 65.00 | |||
(Note) Change in dividends forecast from the most recent announcement: None | ||||||||
3. Earnings Forecast for the fiscal year ending March 31, 2021 | ||||||||
First half | Full-year | |||||||
Change* | Change* | |||||||
Net sales | Millions of yen | 46,000 | (13.3)% | 96,000 | (9.0)% | |||
Operating income | Millions of yen | 3,300 | (33.4)% | 8,000 | (17.5)% | |||
Ordinary income | Millions of yen | 3,500 | (32.6)% | 8,400 | (18.6)% | |||
Net income | Millions of yen | 2,400 | (24.8)% | 5,700 | (12.4)% | |||
Earnings per share | Yen | 101.14 | - | 240.22 | - | |||
(Note) Change in dividends forecast from the most recent announcement: None
* Notes | |
(1) Changes in significant subsidiaries during the current quarterly period | |
(Changes in specified subsidiaries resulting in the change in scope of consolidation): | None |
- Application of accounting methods used specifically for the preparation of quarterly
consolidated financial statements: | None | |
(3) Changes in accounting policies, accounting estimates and restatements of revisions | None | |
1) | Changes in accounting policies due to revisions of accounting standards, etc.: | None |
2) | Changes in accounting policies other than 1): | None |
3) | Changes in accounting estimates: | None |
4) | Restatement of revisions: | None |
- Number of outstanding shares (common stock)
1) | Number of shares outstanding at the end of the period (including treasury shares) | ||
As of June 30, 2020: | 26,731,415 | shares | |
As of March 31, 2020: | 26,731,415 | shares | |
2) | Number of treasury shares at the end of period | ||
As of June 30, 2020: | 3,002,736 | shares | |
As of March 31, 2020: | 3,002,722 | shares | |
3) | Average number of shares outstanding in each period | ||
Three months ended June 30, 2020 | 23,728,689 | shares | |
Three months ended June 30, 2019 | 23,191,445 | shares |
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*Disclosure regarding the execution of the quarterly review process:
This quarterly financial results are outside the scope of the quarterly review by certified public accountants or an audit firm.
*Appropriate use of financial forecasts, other special notes:
This material contains forward-looking statements such as earnings forecast about OSAKA SODA CO., LTD. and its group companies ("Osaka Soda Group"). These forward-looking statements are based on the current assumptions and beliefs of Osaka Soda Group in light of the information currently available to it, and contain known and unknown risks, uncertainties and other factors. Osaka Soda Group therefore wishes to caution readers that actual results could be materially different from any future results.
DISCLAIMER:
This is an English translation of the original Japanese document and is prepared for reference. Should there be any inconsistency between the translation and the Japanese original, the latter shall prevail. This translation is subject to change without notice. Osaka Soda Group shall individually or jointly accept no responsibility or liability for damage or loss caused by any error, inaccuracy, misunderstanding, or changes with regard to this translation.
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4. Qualitative Information (1)Results of Operations
During the three months ended June 30, 2020, Japan's economy has remained in an extremely difficult situation due to the sluggish economic activity caused by the spread of novel coronavirus infections. Recently, the number of newly infected person has been on the rise again, and the outlook remains uncertain.
Under the circumstances, in the last year of the Medium-Term Management Plan "BRIGHT - 2020", which was launched from the previous fiscal year, Osaka Soda Group continued to promote three basic policies, "Creating new growth engines", "Establishing a profitable global business", and "Completing business structural reforms".
As a result, net sales were ¥23,257 million, a decrease of 13.0% compared to the same period of fiscal 2019. Operating income was ¥1,947 million, a decrease of 26.5% compared to the same period of fiscal 2019. Ordinary income was ¥2,165 million, a decrease of 23.3% compared to the same period of fiscal 2019. Net income attributable to owners of parent was ¥1,470 million, a decrease of 13.2% compared to the same period of fiscal 2019.
The following is a summary of reporting segments.
Basic Chemical Products
In Chlor-Alkali, net sales decreased due to the decline in overall domestic demand caused by the spread of novel coronavirus infections
In Epichlorohydrin, net sales decreased due to the decline in domestic & overseas demand though electronic materials sales continued to increase steadily.
As a result, Basic Chemical Products reported net sales of ¥10,138 million, down 17.1% compared to the same period of fiscal 2019.
Functional Chemical Products
Diallyl Phthalate Resin was affected by the declining demand of UV curable inks in Europe due to the spread of novel coronavirus infections.
In Allyl Ethers, net sales increased due to volume growth in exported sales to United States.
In Synthetic Rubber and related businesses, Epichlorohydrin Rubber was affected by the decline in the number of global automobiles production. Acrylic Rubber was increasingly adopted by new customers in China and Europe.
In Separation Media in Pharmaceutical Industry (Silica Gel for Liquid Chromatography), the demand for peptide drug purification continued to increase in India and China. In addition, Colum for Liquid Chromatography and Analytical Instruments continued to increase favorably in instruments sales to Korea.
In Active Pharmaceutical Ingredients (API) and their Intermediates, the sales of both anti-tuberculosisdrug intermediates and insomnia treatment intermediates increased. Also, the number of contract manufacturing increased in high pharmacologically active drug.
As a result, Functional Chemical Products reported net sales of ¥9,220 million, down 9.9% compared to the same period of fiscal 2019.
Housing Facilities and Others
Net sales were ¥3,898 million, down 8.8% compared to the same period of fiscal 2019. Construction materials sales were sluggish.
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Financial Condition Assets
Current assets were ¥69,504 million, a decrease of 0.5% since March 31, 2020. The decrease was due primarily to a decrease of ¥2,055 million in notes and accounts receivable-trade, a decrease of ¥770 million in
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cash and deposits respectively, an increase of ¥1,043 million in merchandise and finished goods, an increase of ¥1,036 million in electronically recorded monetary claims, an increase of ¥219 million in work in process, an increase of ¥106 million in raw materials and supplies respectively.
Noncurrent assets were ¥41,927 million, an increase of 2.3% since March 31, 2020. The decrease was due primarily to an increase of ¥1,608 million in investment securities, a decrease of ¥491 million in property, plant, and equipment - net.
As a result, Total assets were ¥111,431 million, an increase of 0.5% since March 31, 2020.
Liabilities
Current liabilities were ¥24,783 million, a decrease of 7.0% since March 31, 2020. The decrease was due primarily to a decrease of ¥ 1,033 million in notes and accounts payable- trade, a decrease of ¥835 million in income taxes payable respectively.
Noncurrent liabilities were ¥15,717 million, an increase of 4.3% since March 31, 2020. The increase was due primarily to an increase of ¥706 million in deferred tax liabilities.
As a result, Total liabilities were ¥40,501 million, a decrease of 2.9% since March 31, 2020.
Net assets
Net assets were ¥70,930 million, an increase of 2.6% since March 31, 2020.
(3) Earnings Forecasts
There are no revisions to the earnings forecast from the previous forecast announced in the "Consolidated financial results both for the quarterly period ended September 30, 2020 and for the year ended March 31, 2021" dated on May 11, 2020.
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5. Consolidated Financial Statements
CONSOLIDATED BALANCE SHEETS
(Millions of yen)
March 31, 2020 | June 30, 2020 | |||
Assets | ||||
Current assets | ||||
Cash and deposits | 15,099 | 14,329 | ||
Notes and accounts receivable-trade | 25,641 | 23,586 | ||
Electronically recorded monetary claims | 3,096 | 4,132 | ||
Short term investment securities | 14,299 | 14,798 | ||
Merchandise and finished goods | 6,901 | 7,944 | ||
Work in process | 1,368 | 1,587 | ||
Raw materials and supplies | 2,268 | 2,374 | ||
Other current assets | 1,296 | 850 | ||
Less: Allowance for doubtful accounts | (100) | (100) | ||
Total current assets | 69,871 | 69,504 | ||
Noncurrent assets | ||||
Property, plant, and equipment | ||||
Property, plant, and equipment - Net | 10,110 | 9,736 | ||
Other - Net | 11,743 | 11,625 | ||
Total property, plant and equipment | 21,853 | 21,362 | ||
Intangible assets | ||||
Goodwill | 681 | 635 | ||
Other | 346 | 323 | ||
Total intangible assets | 1,027 | 959 | ||
Investments and other assets | ||||
Investment securities | 16,803 | 18,411 | ||
Deferred tax assets | 368 | 290 | ||
Other, net | 933 | 909 | ||
Less: Allowance for doubtful accounts | (6) | (6) | ||
Total investment and other assets | 18,099 | 19,605 | ||
Total noncurrent assets | 40,980 | 41,927 | ||
Total assets | 110,851 | 111,431 | ||
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CONSOLIDATED BALANCE SHEETS (Continued)
(Millions of yen)
March 31, 2020 | June 30, 2020 | |||
Liabilities | ||||
Current liabilities | ||||
Notes and accounts payable- trade | 13,159 | 12,125 | ||
Short term loans payable | 7,767 | 7,767 | ||
Income taxes payable | 1,278 | 443 | ||
Provision for bonuses | 911 | 457 | ||
Other current liabilities | 3,543 | 3,990 | ||
Total current liabilities | 26,660 | 24,783 | ||
Noncurrent liabilities | ||||
Bonds with subscription rights to shares | 10,000 | 10,000 | ||
Deferred tax liabilities | 436 | 1,142 | ||
Provision for directors retirement benefits | 281 | 13 | ||
Net defined benefit liability | 3,265 | 3,243 | ||
Other noncurrent liabilities | 1,085 | 1,317 | ||
Total noncurrent liabilities | 15,069 | 15,717 | ||
Total liabilities | 41,730 | 40,501 | ||
Net assets | ||||
Shareholders' equity | ||||
Capital stock | 15,870 | 15,870 | ||
Capital surplus | 14,387 | 14,387 | ||
Retained earnings | 41,870 | 42,569 | ||
Treasury stock | (6,682) | (6,682) | ||
Total shareholders' equity | 65,446 | 66,145 | ||
Accumulated other comprehensive income | ||||
Valuation difference on available-for-sale securities | 4,177 | 5,305 | ||
Deferred gains or losses on hedges | 8 | 5 | ||
Foreign currency translation adjustments | 7 | (21) | ||
Re-measurements of defined benefit plans | (518) | (508) | ||
Total accumulated other comprehensive income | 3,674 | 4,781 | ||
Non-controlling interests | - | 3 | ||
Total net assets | 69,121 | 70,930 | ||
Total net assets and liabilities | 110,851 | 111,431 | ||
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CONSOLIDATED STATEMENTS OF INCOME
(Millions of yen)
Three Months Ended | ||||
June 30, 2019 | June 30, 2020 | |||
Net sales | 26,736 | 23,257 | ||
Cost of sales | 20,939 | 18,314 | ||
Gross profit | 5,797 | 4,942 | ||
Selling, general, and administrative expenses | 3,147 | 2,994 | ||
Operating income | 2,649 | 1,947 | ||
Non-operating income | ||||
Interest income | 3 | 4 | ||
Dividend income | 239 | 256 | ||
Share of profit of entities accounted for using equity | 11 | - | ||
method | ||||
Other | 14 | 21 | ||
Total non-operating income | 268 | 282 | ||
Non-operating expenses | ||||
Interest expenses | 24 | 22 | ||
Share of loss of entities accounted for using equity | - | 10 | ||
method | ||||
Foreign exchange loss | 64 | 24 | ||
Other | 8 | 6 | ||
Total non-operating expenses | 96 | 64 | ||
Ordinary income | 2,821 | 2,165 | ||
Extraordinary loss | ||||
Loss on retirement of noncurrent assets | 25 | 42 | ||
Loss on valuation of investment securities | 363 | - | ||
Other | 2 | - | ||
Total extraordinary loss | 391 | 42 | ||
Income before income taxes | 2,430 | 2,123 | ||
Income taxes - current | 345 | 371 | ||
Income taxes - deferred | 391 | 282 | ||
Total income taxes | 737 | 653 | ||
Net income | 1,693 | 1,470 | ||
Net income attributable to non-controlling interests | - | (0) | ||
Net income attributable to owners of parent | 1,693 | 1,470 | ||
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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Millions of yen)
Three Months Ended | |||
June 30, 2019 | June 30, 2020 | ||
Net income | 1,693 | 1,470 | |
Other comprehensive income | |||
Valuation difference on available-for-sale securities | (283) | 1,128 | |
Deferred gains or losses on hedges | (6) | (2) | |
Foreign currency translation adjustments | 3 | (26) | |
Re-measurements of defined benefit plans | 8 | 9 | |
Share of other comprehensive income of entities | (0) | (2) | |
accounted for using equity method | |||
Total other comprehensive income | (277) | 1,107 | |
Comprehensive income | 1,415 | 2,577 | |
Comprehensive income attributable to: | |||
Owners of parent | 1,415 | 2,577 | |
Non-controlling interests | - | (0) |
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6. Notes to the Consolidated Financial Statements
(1) | Notes regarding the going concern assumption: | None |
(2) | Notes on significant changes in shareholders' equity: | None |
- Segment information
Three months ended June 30, 2019 | (Millions of yen) | |||||
Basic | Functional | Housing | Consolidated | |||
Chemical | Chemical | Facilities | Total | Adjustments*1 | operating | |
Products | Products | and Others | income *2 | |||
Net sales | ||||||
External sales | 12,233 | 10,228 | 4,274 | 26,736 | - | 26,736 |
Intersegment sales | 9 | 25 | 231 | 266 | (266) | - |
or reclassifications | ||||||
Total | 12,242 | 10,254 | 4,506 | 27,003 | (266) | 26,736 |
Segment income | 1,374 | 1,407 | 160 | 2,942 | (292) | 2,649 |
Note 1: Adjustments of segment income of ¥(292) million are corporate expenses not allocated to reportable segments. Corporate expenses are mainly expenses not attributable to a reporting segment and related to fundamental research and development as well as administrative departments.
Note 2: Segment income has been adjusted for the operating income appearing in the quarterly consolidated statements of income.
Three months ended June 30, 2020 | (Millions of yen) | |||||
Basic | Functional | Housing | Consolidated | |||
Chemical | Chemical | Facilities | Total | Adjustments *1 | operating | |
Products | Products | and Others | income *2 | |||
Net sales | ||||||
External sales | 10,138 | 9,220 | 3,898 | 23,257 | - | 23,257 |
Intersegment sales | 8 | 53 | 133 | 194 | (194) | - |
or reclassifications | ||||||
Total | 10,147 | 9,273 | 4,031 | 23,452 | (194) | 23,257 |
Segment income | 1,089 | 1,075 | 66 | 2,231 | (283) | 1,947 |
Note 1: Adjustments of segment income of ¥(283) million are corporate expenses not allocated to reportable segments. Corporate expenses are mainly expenses not attributable to a reporting segment and related to fundamental research and development as well as administrative departments.
Note 2: Segment income has been adjusted for the operating income appearing in the quarterly consolidated statements of income.
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Osaka Soda Co. Ltd. published this content on 11 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 August 2020 08:03:09 UTC