Review of Financial Results

  • FY09 / 2024
    Third Quarter
  • FY09 / 2024
    Second Quarter
  • FY09 / 2024
    First Quarter
  • FY09 / 2023
    Full Year

During the first nine months (October 1, 2023 to June 30, 2024) of the consolidated fiscal year under review, the Japanese economy rallied at a mild pace, however, recently the recovery appears to have stalled. The world economy rebounded, although the economies of some regions were weak. Looking at separate regions where the Group operates, we anticipate that the U.S. economy will continue to grow. However, it is necessary to pay attention to downside risks due to a possible cessation of decline in the inflation rate. The Chinese economy remained at a standstill although supply increased with the help of a governmental policy. Other Asian economies are generally seeing a moderate recovery.
Under such conditions, consolidated results for the first nine months under review were net sales of ¥95,946 million (up 6.4% year on year), operating profit of ¥5,877 million (up 13.1% year on year), ordinary profit of ¥7,293 million (up 30.2% year on year), and profit attributable to owners of the parent of ¥4,722 million (up 27.5% year on year).


Results for each business segment are described below.

(i) Chemicals
Sales of rubber-related products tumbled year on year although demand for raw materials remained on a recovery trend amid strong automobile production in Japan. In contrast, profit was solid after revision to sales prices of imported goods and sales growth of high value-added secondary materials.
Sales and profit in chemical-related merchandise were positive, thanks to the good performance of mainstay products and improved profitability resulting from price revisions to incorporate surging purchase prices.
In life science-related merchandise, sales and profit were both strong, reflecting brisk sales of electrical materials, surfactants and other mainstay products as well as continued buoyant performance of the new business with drilling fluid additives and chemicals.
As a result, the Chemicals segment recorded net sales of ¥30,642 million (up 4.7% year on year) and operating profit of ¥2,043 million (up 22.5% year on year).


(ii) Machinery & Industrial Products
Sales of merchandise related to industrial products were buoyant amid the strong production of affiliated Japanese auto manufacturers. However, changes in the competitive environment affected profit.
The performance of green technology merchandise (formerly called merchandise related to machinery and the environment) improved, following solid progress in the delivery of the main units of feed processing machines and in sales of related wearing parts. In wood biomass-related business, sales and profit dropped. While a large order was gained, no project for main units was recorded.
Both sales and profit decreased in merchandise related to scientific equipment due to a decrease in orders received as a result of rises in sales prices, which were primarily attributable to price hikes by manufacturers, and the weaker yen.
In merchandise related to resource development handled by Cosmos Shoji Co., Ltd., a strong performance was seen in ocean development and in oil- and gas-related equipment. Sales of equipment related to geothermal heat rallied after the end of the slow period. Regarding the main functional feed raw materials handled by YPTECH Co., Ltd., profit tumbled due to weak demand for mainstay products. Sales of biotech products handled by Scrum Inc. were bullish, mainly in the field of genetic analysis.
As a result, the Machinery & Industrial Products segment recorded net sales of ¥37,803 million (up 8.7% year on year) and operating profit of ¥3,620 million (up 1.4% year on year).


(iii) Overseas Subsidiaries
Sanyo Corporation of America earned more profit. Although sales dropped due to the reduction of the unit selling prices of high performance resins, sales of film- and automobile-related merchandise were strong. Results at SANYO TRADING (SHANGHAI) CO., LTD. declined due to the economic slowdown. At Sanyo Trading Asia Co., Ltd. (Thailand), automobile-related merchandise sold well. At Sun Phoenix Mexico, S.A. de C.V., automobile merchandise and rubber-related merchandise performed well. At Sanyo Trading India Private Limited, automobile merchandise sold well. At SanyoTrading (Viet Nam) Co., Ltd., results were strong after the launch of the new business with drilling fluid additives and chemicals. PT. Sanyo Trading Indonesia achieved healthy performance with temporary demand growth for rubber-related products.
As a result, the Overseas Subsidiaries segment recorded net sales of ¥26,353 million (up 4.1% year on year) and operating profit of ¥1,461 million (up 46.8% year on year).

During the first six months (October 1, 2023 to March 31, 2024) of the consolidated fiscal year under review, the Japanese economy rallied at a mild pace, however, recently the recovery appears to have stalled. The world economy rebounded, although the economies of some regions were weak. Looking at regions where the Group operates, we anticipate that the U.S. economy will continue to grow. However, it is necessary to pay attention to downside risks due to monetary restraint. In China, there are signs of an economic recovery supported by policies. Attention must be paid to the impact of continued stagnation in the real estate market and the continued fall of prices. Other Asian economies are generally seeing a moderate recovery.

Under such conditions, consolidated results for the first six months under review were net sales of ¥64,928 million (up 4.5% year on year), operating profit of ¥4,317 million (up 13.9% year on year), ordinary profit of ¥4,935 million (up 31.3% year on year), and profit attributable to owners of the parent of ¥3,146 million (up 24.8% year on year).


Results for each business segment are described below.

(i) Chemicals
For sales of rubber-related merchandise, automobile production in Japan was strong and demand for raw materials continued to trend toward a recovery. However, quantities did not reach the level in the same period of the previous year and sales declined year on year. Meanwhile, sales of secondary materials for high value-added merchandise grew. Profit was roughly flat from the same period in the previous year.
Regarding chemical-related merchandise, sales and profit rose year on year thanks to brisk sales of mainstay products, the introduction of new products and the improvement of profitability due to the revision of selling prices following the increase of purchase prices.Regarding life science-related merchandise, sales and profit were strong. This is a result mainly of the strong performance of electrical materials and other mainstay products and the launch of a new drilling fluid additives and chemicals business.
As a result, the Chemicals segment recorded net sales of ¥19,879 million (down 0.5% year on year) and operating profit of ¥1,255 million (up 8.5%).


(ii) Machinery & Industrial Products
Sales of merchandise related to industrial products were buoyant amid the strong production of affiliated Japanese auto manufacturers. However, changes in the competitive environment affected profit.
Results related to green technology merchandise (formerly called merchandise related to machinery and the environment) improved year on year, following progress in delivery of feed processing machines and buoyant sales of consumables related to these machines. Wood biomass-related businesses saw no orders for main units but it won an order for a large project.
Both sales and profit decreased year on year in merchandise related to scientific equipment due to a decrease in orders received as a result of rises in sales prices, which were primarily attributable to price hikes by manufacturers, and the weaker yen.
In merchandise related to resource development handled by Cosmos Shoji Co., Ltd., sales of equipment related to geothermal heat struggled in the drilling off season, while sales of oil and gas-related equipment and sales in the field of ocean development were firm. Regarding the main functional feed raw materials handled by YPTECH Co., Ltd., sales and profit were the same level as they were in the year-ago period, a reflection of weak demand for mainstay products. Performance related to the biotech products handled by Scrum Inc. was higher than in the same period of the previous fiscal year, especially in relation to genetic analysis. These strong results were due to the start of a high sales phase.
As a result, the Machinery & Industrial Products segment recorded net sales of ¥26,565 million (up 10.2% year on year) and operating profit of ¥2,759 million (up 5.1% year on year).


(iii) Overseas Subsidiaries
Sanyo Corporation of America earned more profit than in the same period of the previous fiscal year. Although sales dropped year on year due to the reduction of the unit selling prices of high performance resins, sales of film- and automobile-related merchandise were strong. Results at SANYO TRADING (SHANGHAI) CO., LTD. declined from the year-ago level due to the economic slowdown. At Sanyo Trading Asia Co., Ltd. (Thailand), automobile-related merchandise sold well. At Sun Phoenix Mexico, S.A. de C.V., automobile merchandise and rubber-related merchandise performed well. At Sanyo Trading India Private Limited, automobile merchandise sold well. Sanyo Trading (Viet Nam) Co., Ltd. achieved a turnaround, with strong sales of rubber-related merchandise and the launch of drilling fluid additives and chemicals. At PT. Sanyo Trading Indonesia, rubber products were weak.
As a result, the Overseas Subsidiaries segment recorded net sales of ¥17,704 million (up 0.6% year on year) and operating profit of ¥1,133 million (up 59.9%).

During the first three months (October 1, 2023 to December 31, 2023) of the consolidated fiscal year under review, the global economy remained uncertain, chiefly due to monetary tightening worldwide, rising geopolitical risks, such as the prolonged Russian-Ukraine war and the deteriorating situation in the Middle East, and a delayed recovery in the Chinese economy. Despite these challenges, the world economy is recovering moderately.

Looking at the regions where the Group operates, we observed firm consumer spending and housing investment, as well as an improvement in business confidence in the United States. In China, business confidence declined due to concerns over weak real estate investment and persistently high unemployment rates. Meanwhile, other Asian economies are generally seeing a moderate recovery. In Japan, the economy was improving, driven chiefly by firm consumer spending and automobile production, although inflation remained high.

Under such conditions, consolidated results for the first three months under review were net sales of ¥33,075 million (up 5.3% year on year), operating profit of ¥2,305 million (up 17.6%), ordinary profit of ¥2,233 million (up 34.0%), and profit attributable to owners of parent of ¥1,373 million (up 14.5%).


Results for each business segment are described below.

(i) Chemicals
Sales and profit in rubber-related merchandise declined from the year-ago level partly due to higher purchasing prices caused by the weaker yen, although demand for raw materials was trending toward a recovery, reflecting progress in the reduction of parts held by customers associated with improvements in automobile production in Japan.
Sales and profit in chemical-related merchandise were positive, thanks to the good performance of mainstay products, the introduction of new products, and improved profitability resulting from price revisions. In the life science-related merchandise, both sales and profit were strong, reflecting the good performance of mainstay products, such as electric materials, films and fragrances.
As a result, the Chemicals segment recorded net sales of ¥9,964 million (down 2.5% year on year) and operating profit of ¥638 million (up 8.7%).


(ii) Machinery & Industrial Products
Both sales and profit of merchandise related to industrial products remained strong due to the recovery of production at Japanese-affiliated auto manufacturers.
Results in green technology merchandise (formerly named merchandise related to machinery and the environment) improved from the previous fiscal year, reflecting the promotion of sales of consumables related to feed processing machines and orders for large capital investment projects. Wood biomass-related businesses saw no orders for main units and performed poorly.
Both sales and profit were weak in merchandise related to scientific equipment due to a decrease in orders received as a result of rises in sales prices, which were primarily attributable to price hikes by manufacturers, and the weaker yen.
In merchandise related to resource development handled by Cosmos Shoji Co., Ltd., sales of equipment related to geothermal heat remained strong, and sales of oil and gas-related equipment and sales in the ocean development field were firm. Sales of the main functional feed raw materials handled by YPTECH Co., Ltd. were strong. Performance remained strong in relation to the biotech products, especially those related to genetic analysis, carried by Scrum Inc.
As a result, the Machinery & Industrial Products segment recorded net sales of ¥13,408 million (up 16.2% year on year) and operating profit of ¥1,464 million (up 10.6% year on year).


(iii) Overseas Subsidiaries
At Sanyo Corporation of America, film-related merchandise and automobile-related merchandise performed well. Results at SANYO TRADING (SHANGHAI) CO., LTD. declined from the year-ago level due to the economic slowdown. At Sanyo Trading Asia Co., Ltd. (Thailand), automobile-related merchandise sold well. At Sun Phoenix Mexico, S.A. de C.V., automobile merchandise performed well. At Sanyo Trading India Private Limited, rubber-related merchandise was weak. Sanyo Trading (Viet Nam) Co., Ltd.’s results were poor given the impact of a decline of the Vietnamese economy. At PT. Sanyo Trading Indonesia, rubber products were weak.
As a result, the Overseas Subsidiaries segment recorded net sales of ¥9,276 million (down 2.7% year on year) and operating profit of ¥695 million (up 71.6%).

During the consolidated fiscal year under review (October 1, 2022 to September 30, 2023), the global economy was recovering, reflecting the post-COVID resumption of economic activity. However, there were concerns about a possible slowdown of the global economy due to increased geopolitical risk particularly stemming from the worsening situation of the prolonged war in Ukraine, rising resource prices, and interest rate hikes.

Upon taking a brief look at the regions where the Group operates, we observed a modest slowdown in the US economy. This was due to rising costs in companies resulting from inflation and monetary tightening implemented to curb inflation. In China, capital expenditures and consumer spending rebounded after the end of the zero-COVID-19 policy towards the end of last year. However, business confidence declined due to concerns over weak real estate investment and persistently high unemployment rates. In ASEAN countries, despite negative factors including rises in prices of imported goods due to weaker currencies caused by interest rate hikes in the United States, consumer spending increased, and the economies were firm.

Japan experienced an inflationary trend caused by a rise in costs for raw materials and energy. However, the economy showed an upward trend due to rising domestic demand, the relaxation of COVID-19 restrictions, and a rebound in inbound tourism demand, which was aided by the weaker yen.

In this business environment, the Group has been making a group-wide effort to improve its business performance by pursuing and deepening higher value-added businesses, leveraging its strengths along with its long-term plan, VISION2023, which covered the period up to the fiscal year under review, and continuing striving to strengthen the existing businesses, develop new businesses, accelerate the global expansion and promote new investments.

As digital transformation advances, the Company made investments to make Cosmo Computing System, Inc. a subsidiary and built a system to internally develop systems and promptly provide digital services from a place closer to business operations. Though this, the Company aims to respond quickly to changes in the business environment, customers’ demand for digitalization, and the need for digitalization within the Group. The Company made KOTAI Biotechnologies, Inc. (“KOTAI”) a part of the Group to strengthen the Group’s biotech business. In addition to selling equipment and reagents that support biotech research, which is done by Scrum Inc., which became a Group company in February 2022, the Group provides contract genetic analysis services and assistance to drug development research through KOTAI.

The New Business Development Dept., which is responsible for developing new businesses, invested in SOLCOLD LTD, a startup based in Israel that researches and develops coating films that use a sunlight cooling effect. The department also invested in UMI Ⅲ Decarbonization Investment Limited Partnership established by UMI Universal Materials Incubator Co., Ltd. to interact with startups, gather information on cutting-edge technologies, and pursue synergy effects. Moreover, with this, the department is committed to creating next-generation businesses in the fields of fine chemicals, life sciences, and sustainability.

Consolidated results were net sales of ¥122,596 million (up 10.2% year on year), operating profit of ¥6,740 million (up 26.7% year on year), ordinary profit of ¥7,149 million (up 13.5% year on year), and profit attributable to owners of the parent of ¥4,830 million (up 12.4% year on year).


Results for each business segment are described below.

(i) Chemicals
Sales of rubber-related merchandise rose from the previous fiscal year due to an increase in unit selling prices and sales of strategic items. However, profit from merchandise decreased year on year mainly due to steep rises in purchase prices resulting from the weak yen and inventory adjustments at purchasing companies.
In chemical-related merchandise, sales rose year on year mainly due to an increase in sales of new products. However, profit remained flat year on year due to a slowdown in market demand and steep rises in purchase prices that resulted from the weak yen. In life science-related merchandise, sales of fragrances and dyes remained on a strong note while sales of electronic materials and functional food materials were weak.
As a result, the Chemicals segment recorded net sales of ¥38,298 million (up 1.5% year on year) and operating profit of ¥2,185 million (down 12.9% year on year).


(ii) Machinery & Industrial Products
Both sales and profit of merchandise related to industrial products remained strong due to progress in recovery of production at Japanese-affiliated auto manufacturers.
Merchandise related to machinery and the environment performed poorly, chiefly reflecting manufacturers’ moves to refrain from large-scale capital investment. The Company worked to improve maintenance and parts services.
Of merchandise related to scientific equipment, sales of weather-resistance testers, corrosion testers, and particle dispersion measurement equipment were firm.
In merchandise related to resource development handled by Cosmos Shoji Co., Ltd., sales of equipment related to geothermal heat were strong, and sales of oil and gas-related equipment were firm. Performance remained strong in relation to the biotech products carried by Scrum Inc.
Sales of functional feed raw materials handled by YPTECH Co., Ltd. rose. Shin-Toyo Kikai Kogyo Co., Ltd. has become a consolidated subsidiary in the fiscal year under review.
As a result, the Machinery & Industrial Products segment recorded net sales of ¥47,044 million (up 29.5% year on year) and operating profit of ¥4,450 million (up 40.3% year on year).


(iii) Overseas Subsidiaries
At Sanyo Corporation of America, film-related merchandise performed well, but automobile-related merchandise was weak. At SANYO TRADING (SHANGHAI) CO., LTD., lithium-ion batteries-related merchandise performed well, but automobile-related merchandise was weak. At Sanyo Trading Asia Co., Ltd. (Thailand), automobile-related merchandise sold well. At Sun Phoenix Mexico, S.A. de C.V., automobile merchandise performed well. At Sanyo Trading India Private Limited, rubber-related merchandise sold well. Sanyo Trading (Viet Nam) Co., Ltd.’s results were poor given the impact of a decline of the Vietnamese economy. At PT. Sanyo Trading Indonesia, rubber products achieved favorable sales.
As a result, the Overseas Subsidiaries segment recorded net sales of ¥36,039 million (down 2.6% year on year) and operating profit of ¥1,347 million (up 9.0% year on year).