Tokyo-Chemicals group Tosoh Corp. posted a net loss of Yen 3400 million ($35.5 million) for the first quarter of the 2010 fiscal year, ended 30 June 2009. This loss compares with net income of ¥3000 million for the same period the previous fiscal year.
Net sales declined 30.7 percent from Q1 a year earlier, to Yen 134 000 million, said Tosoh.
According to the chemicals group, which owns Nippon Polyurethane Industry Co. Ltd. (NPU), the earnings downturn "resulted from ongoing deterioration in the Japanese economy, which was negatively affected by the turmoil in global financial markets that began in the second half of calendar year 2008."
Tosoh's president Kenichi Udagawa told Japanese news service The Nikkei 18 Sept that group operating profit for April- Sept would be likely to fall below its earlier estimate. The group had estimated that group operating profit would fall 67 per cent from a year earlier to Yen 4000 million, but Udagawa said worse results are expected as feedstock prices have cut profits at its urethane unit and other operations.
During Tosoh's fiscal Q1 2010, Japan saw a decrease in capital investments and consequently a rapid increase in workforce layoffs, Tosoh added.
The group's quarterly results statement said that exports strengthened in Q1 2010, but that its operating environment remained severe. Meanwhile, the chemical industry overall saw some positive trends for a few petrochemical products in Asia -- particularly in China, but conditions remained harsh. For Tosoh, the result was weakening markets abroad for
core chemical products as polyvinyl chloride. A drop in naphtha and raw materials undermined price structures in Japan.
In its Specialty Group, which includes urethane materials, Tosoh suffered an operating loss of Yen 2300 million in Q1, compared with operating income of Yen 2200 million for Q1 2009. Specialty Group net sales declined 30.2 percent, to Yen 51 800 million.
Shipments of ethyleneamines and electrolytic manganese dioxide for batteries were solid, said Tosoh, but all other sales in this segment, including polyurethane raw materials, declined.
NPU makes MDI (methylene diphenyl diisocyanate), TDI (toluene diisocyanate) and HDI (hexamethylene diisocyanate), while Tosoh is also a leading supplier of amine catalysts to the polyurethane sector. "