Press Releases

May 21, 1998
Asahi Chemical Industry Co., Ltd.

(Unit: Millions of Yen)

Financial Highlights

The Japanese business environment deteriorated sharply during the second half of fiscal 1997, with the failure of major financial institutions as well as the consumption tax rise contributing to consumer anxiety and declining private consumption, in addition to the impact of the economic turmoil in several Asian countries with significant economic ties to Japan.



For the Asahi Chemical Group, electronics-related products continued to perform favorably, and results in chemicals and plastics improved owing to cost reductions and rising sales of basic chemicals. Consolidated results for the fiscal year nevertheless fell short of those of the previous year; demand for housing and construction materials was depressed, pharmaceuticals operations suffered as the government implemented policies to curtail health care expenditure, and the effects of the Asian currency crisis on overseas subsidiaries outweighed improvements gained through restructuring in fibers and textiles. Sales decreased by 9,923 million yen to 1,281,675 million yen, with operating profit decreasing by 9,288 million yen to 62,814 million yen. Ordinary profit also decreased by 4,414 million yen to 56,271 million yen, and net income decreased by 4,545 million yen to 20,808 million yen.

 

• In Chemicals and Plastics, despite weak demand in both domestic and overseas markets, sales increased by 10,285 million yen from the previous year, to 373,874 million yen, and operating profit increased by 811 million yen, to 13,842 million yen. Concerted efforts to expand sales of basic chemicals, and pervasive cost reductions throughout the Asahi Chemical Group were major contributors to these results.

   

• In Housing and Construction Materials, despite concentrated efforts to promote sales and the introduction of new products, sales decreased by 26,874 million yen from the previous year, to 424,532 million yen, and operating profit decreased by 10,064 million yen, to 19,022 million yen, as a consequence of the sharp fall in demand for both residential and commercial buildings.

   

• In Fibers and Textiles, sales decreased by 2,523 million yen from the previous year, to 181,542 million yen, and operating profit decreased by 132 million yen, to 4,854 million yen.Progress in thoroughly restructuring commodity synthetic fiber operations largely counterbalanced weakening domestic demand for clothing, but overall, efforts to strengthen the operational structure, including the withdrawal from acrylic fiber operations in Ireland, were outweighed by the adverse effects of the currency crisis on our subsidiaries in Southeast Asia.

   

• In Special Products and Services, sales increased by 9,189 million yen, to 301,727 million yen, and operating profit increased by 285 million yen, to 25,360 million yen. Favorable results in electronics-related products continued, and sales growth in specialty products was particularly strong. Nevertheless, overall growth for the sector was limited, as government measures to curb health care expenditures hampered performance in pharmaceuticals.