Review of Financial Results

  • FY09 / 2021
    Full year
  • FY09 / 2021
    Third quarter
  • FY09 / 2021
    Second quarter
  • FY09 / 2021
    First quarter


In the fiscal year under review, the Japanese economy continued to face difficult conditions due to the effects of COVID-19 However, there were signs of improvement, including the lifting of a state of emergency at the end of September in response to a rising vaccination rate and a falling number of newly infected persons. Meanwhile, automobile production decreased due to a semiconductor supply shortage. The Chinese economy slowed down. There is concern that COVID-19 may start spreading again toward the end of 2021. The outlook for the Japanese economy remains uncertain due to those factors. In this business environment, Sanyo Trading Co., Ltd. and its consolidated subsidiaries (the “Group”) united in their efforts to improve operating results, continuing to pursue and bolster high value-added businesses by taking advantage of their strengths, develop new businesses, accelerate global operations, and promote new investment based on the long-term management plan, VISION2023, adopting employees’ safety as the top priority. To strengthen personnel training, build a Group-wide system for new business development, and enhance the efficiency of global logistics functions, Sanyo Trading Co., Ltd. (the “Company”) established the Human Resources Department, the New Business Development Department and the Logistics Strategy Department. The Company also set up the Sanyo Technical Center to unify design, development, manufacturing, sales and maintenance services within the Group. For global operations, the Company opened an office in Alabama as the third base in the United States and another one in Laem Chabang as the second base in Thailand. As investment strategies, the Company sold Sanyo-Touchi (Shanghai) Rubber Co., Ltd. and acquired Global Trading Co., Ltd. to strengthen its operations in the field of life science. Consolidated results were net sales of ¥89,788 million (up 18.0% year on year), operating income of ¥5,506 million (up 14.9% year on year), ordinary income of ¥6,190 million (up 17.4% year on year), and earnings attributable to owners of the parent of ¥4,256 million (up 41.3% year on year).

 

Results for each business segment are described below.
YPTECH CO., LTD., which was previously included in the Chemicals segment, is included in the Machinery & Industrial Products segment from the fiscal year under review due to changes in business management classifications. Segment information for the previous fiscal year is prepared based on the calculation method after the change.

 

(i) Chemicals
Tight supply conditions and steep rises in purchasing prices surfaced for rubber merchandise. However, sales remained firm for synthetic rubber and indirect materials for automobiles, home appliances and information equipment. In chemical-related products, sales expanded for new products on which the Company had worked for years. Moreover, the export of electric materials and the export of film-related products were favorable, in addition to the import and sales of mainstay raw materials for paints and inks.
As a result, the Chemicals segment recorded net sales of ¥31,534 million (up 14.5% year on year) and operating income of ¥2,017 million (up 56.9% year on year).

 

(ii) Machinery & Industrial Products
Production adjustments by automobile manufacturers in response to a shortage of semiconductors and parts affected merchandise related to industrial products toward the end of the fiscal year under review. However, sales for the merchandise were strong on a full-year basis, supported by a recovery in automobile production. In merchandise related to machinery and the environment, sales remained strong for merchandise related to feed processing machines, their nondurable parts and maintenance services. Sales were favorable for wood biomass-related businesses, too, mainly due to large projects posted. In merchandise categorized as scientific equipment, elementary analysis equipment and weathering testers performed strongly. In merchandise related to resource development, ocean development equipment and geothermal development equipment achieved strong sales.
As a result, the Machinery & Industrial Products segment recorded net sales of ¥33,414 million (up 10.7% year on year) and operating income of ¥3,665 million (up 7.7% year on year).

 

(iii) Overseas Subsidiaries
At SANYO CORPORATION OF AMERICA, sales remained firm for super absorbent resins, films and rubber merchandise, even though additional tariffs imposed on auto parts made in China produced effects. At SANYO TRADING (SHANGHAI) CO., LTD., automobile- and rubber-related products achieved strong sales, backed by a rapid automobile market recovery. Sales for battery materials expanded substantially, too. At SANYO TRADING ASIA CO., LTD. (in Thailand), sales stayed strong for rubber products, chemicals and auto parts. At SANYO TRADING (VIET NAM) CO., LTD., paint and ink products achieved favorable sales. At SUN PHOENIX MEXICO S.A. de C.V., sales for automobile-related parts were strong, in spite of the effects of a steep ‒ 3 ‒ rise in marine transportation expenses. At PT. SANYO TRADING INDONESIA, which the Company included in the scope of consolidation in the current fiscal year, rubber products achieved favorable sales.
As a result, the Overseas Subsidiaries segment recorded net sales of ¥24,689 million (up 35.4% year on year) and operating income of ¥978 million (up 16.5% year on year).


During the first nine months (September 30, 2020 to June 30, 2021) of the consolidated fiscal year ending September 30, 2021, the Japanese economy continued to face difficult conditions due to the effects of COVID-19, but showed signs of a recovery bolstered by the acceleration of the vaccination campaign and improvements in the overseas economy. However, the spread of COVID-19 variants led to a resurgence of cases in July and the areas subject to a state of emergency were expanded to six prefectures. The end of the pandemic is not in sight and the economic outlook remains uncertain.
Under such conditions, consolidated results for the first nine months under review were net sales of \68,425 million (up 19.3% year on year), operating income of \5,083 million (up 33.0%), ordinary income of \5,628 million (up 33.8%), and earnings attributable to owners of parent of \3,791 million (up 38.3%).
Results for each business segment are described below.
Starting in the first quarter of the fiscal year under review, YPTECH Co., Ltd., which was previously included in the Chemicals segment, is included in the Machinery & Industrial Products segment. Accordingly, in the year-on-year comparisons below, the figures for the first nine months of the previous year have been restated to reflect the new segment classification.
 
(i) Chemicals
Rubber merchandise attained healthy sales as demand for raw materials expanded not only for automobile applications but for all industrial applications, although the tight demand-supply situation and price increases intensified. Among chemical-related products, imported sales of mainstay raw materials for UV inks were strong, as were exports of electronic materials to South Korea and films to North America. Following the end of goodwill depreciation related to the acquisition of Sort Co., Ltd. in 2016, the depreciation burden decreased.
As a result, the Chemicals segment recorded net sales of \23,565 million (up 8.2% year on year) and operating income of \1,514 million (up 45.7% year on year).
 
(ii) Machinery & Industrial Products
With respect to merchandise related to industrial products, concerns about production adjustments due to a shortage of semiconductors eased, and strong sales were attained in mainstay materials around seats. As regards merchandise related to machinery and the environment, the large-scale biomass project in Tobetsu-cho in Hokkaido came into being. In association with powder, consumables and maintenance services earned brisk sales. Among the merchandise related to scientific equipment, particle dispersion testers and weathering testers attained steady sales.
As a result, the Machinery & Industrial Products segment recorded net sales of \26,016 million (up 15.2% year on year) and operating income of \3,364 million (up 29.1% year on year).
 
(iii) Overseas Subsidiaries
At Sanyo Corporation of America, sales of super absorbent resins and rubber merchandise remained strong. Nonetheless, additional tariffs on auto parts made in China and an increase in SGA expenses resulted in a slight increase in operating income. The overall performance of Sanyo Trading (Shanghai) Co., Ltd. was very strong thanks to successful growth in sales of auto parts driven by the rapid recovery of the automotive market. Sanyo Trading Asia Co., Ltd. (Thailand) posted gains in sales and income thanks mainly to stable sales of rubber products, in addition to chemicals and auto parts. At Sanyo Trading (Viet Nam) Co., Ltd., sales of paint and ink products were strong. At Sun Phoenix Mexico, S.A. de C.V., sales rose but income fell due to a surge in expenses for marine transportation from China despite strong sales of automobile merchandize. In addition, PT. Sanyo Trading Indonesia is included in the scope of consolidation starting from the current fiscal year.
As a result, the Overseas Subsidiaries segment recorded net sales of \18,731 million (up 45.4% year on year) and operating income of \932 million (up 38.0% year on year).


During the first six months (September 30, 2020, to March 31, 2021) of the consolidated fiscal year ending September 30, 2021, the Japanese economy continued to face difficult conditions due to the effects f COVID-19, but showed signs of recovery bolstered by the effects of economic measures and improvements in overseas economies.
However, concerns remain over the further spread and prolonged impact of the pandemic suggested particularly by the declaration of a state of emergency for the third time in April, covering four prefectures, resulting in continued uncertainty about the future.
Under such conditions, consolidated results for the first six months under review were net sales of ¥45,525 million (up 11.1% year on year), operating income of ¥3,634 million (up 23.3% year on year), ordinary income of ¥4,018 million (up 26.2% year on year), and earnings attributable to owners of the parent of ¥2,667 million (up 26.1% year on year).

 

Results for each business segment are described below.
Starting in the first quarter of the fiscal year under review, YPTECH Co., Ltd., which was previously included in the Chemicals segment, is included in the Machinery & Industrial Products segment. Accordingly, in the year-on-year comparisons below, the figures for the first six months of the previous year have been restated to reflect the new segment classification.

 

(i) Chemicals
Demand for rubber merchandise used for automobiles, office automation, medical equipment, and construction equipment recovered. Sales of a new product, functional filler for heat radiation of electronics, were strong.
Among chemical-related products, sales of raw materials for UV ink such as polymerization initiators, the mainstay product, remained strong. Exports of electronic materials to South Korea and films to North America recovered.
As a result, the segment recorded net sales of ¥15,353 million (up 0.5% year on year) and operating income of ¥922 million (up 26.4% year on year).

 

(ii) Machinery & Industrial Products
As for merchandise related to industrial products, demand for materials around seats, the Company’s mainstay products, grew significantly given continuously high production levels at Japanese automakers. As regards merchandise related to machinery and the environment, delivery of the mainstay product, feed granulators, increased and the levels of consumable components and maintenance service remained high. The woody biomass business enjoyed steady sales from consumables and maintenance service despite the absence of sales of main unit products. In merchandise categorized as scientific equipment, delivery that had been delayed by COVID-19 was completed and demand for inhalant evaluators related to COVID-19 infection control was active.
As a result, the Machinery & Industrial Products segment recorded net sales of \17,569 million (up 3.4% year on year) and operating income of \2,373 million (up 15.5% year on year).

 

(iii) Overseas Subsidiaries
At Sanyo Corporation of America, sales of super absorbent resins and rubber merchandise remained strong, although this was offset by additional tariffs on auto parts made in China and an increase in SGA expenses,resulting in a slight decrease in operating income. The overall performance of Sanyo Trading (Shanghai) Co., Ltd. was very strong thanks to successful growth in sales of auto parts driven by the rapid recovery of the automotive market. Sanyo Trading Asia Co., Ltd. (Thailand) posted gains in sales and income thanks mainly to stable sales of rubber products, in addition to chemicals, and auto parts. At Sanyo Trading (Viet Nam) Co., Ltd., sales of paint and ink products were strong. At Sun Phoenix Mexico, S.A. de C.V., sales rose but income fell due to a surge in expenses for marine transportation from China despite strong sales of automobile merchandize. In addition, PT.
Sanyo Trading Indonesia is included in the scope of consolidation starting from the current fiscal year.
As a result, the Overseas Subsidiaries segment recorded net sales of \12,549 million (up 45.6% year on year) and operating income of \714 million (up 39.6% year on year).


During the first three months (September 30, 2020 to December 31, 2020) of the consolidated fiscal year ending September 30, 2021, the Japanese economy continued to face difficult conditions due to the effects of COVID-19 but showed signs of recovery, bolstered by the effects of various economic measures and improvement of overseas economies. However, the outlook is extremely uncertain, given factors such as the impact of the changeover of political power in the United States and the declaration of a second state of emergency in response to rising infections in Japan.
Under such conditions, consolidated results for the first three months under review were net sales of \21,609 million (up 2.0% year on year), operating income of \1,721 million (up 9.3%), ordinary income of \1,836 million (up 3.1%), and earnings attributable to owners of the parent of \1,226 million (up 10.1%).

 

Results for each business segment are described below.
Starting from the first quarter under review, YPTECH Co., Ltd., which was previously included in the Chemicals segment, is included in the Machinery & Industrial Products segment. Accordingly, in the year-on-year comparisons below, the figures for the first quarter of the previous year have been restated to reflect the new segment classification.

 

(i) Chemicals
With regard to rubber merchandise, both sales and income fell year on year, reflecting the slow pace of recovery in demand. As for chemical merchandise, sales decreased due to the transfer of livestock-related business. However, mainstay paint and ink-related businesses performed strongly and newly established SANYO LIFE MATERIAL CO., LTD. also contributed to earnings.
As a result, the Chemicals segment recorded net sales of \7,206 million (down 8.1% year on year) and operating income of \425 million (up 12.5%).

 

(ii) Machinery & Industrial Products
Merchandise related to industrial products performed solidly as a result of the resumption of production by Japanese automobile manufacturers. Merchandise related to machinery and the environment recorded a
moderate performance, driven by consumables and maintenance services, in the absence of any large projects involving main units. COSMOS SHOJI CO., LTD. recorded strong sales of geothermal drilling equipment
but its income fell short of level the previous year when large projects were recorded. YPTECH CO., LTD.
saw strong sales and increased shipments of livestock feed additives but its income fell due to a combination of higher transport expenses overseas driven by container shortages and higher expenses associated with business transfer. In merchandise categorized as scientific equipment, sales increased reflecting the completion of receiving inspections delayed due to COVID-19 but income fell due to smaller profit margins.
As a result, the Machinery & Industrial Products segment recorded net sales of \8,560 million (up 1.0% year on year) and operating income of \1,149 million (up 8.7% year on year).

 

(iii) Overseas Subsidiaries
At Sanyo Corporation of America, super absorbent resins, automobile merchandise and rubber merchandise performed strongly. Sanyo Trading (Shanghai) Co., Ltd. performed extremely strongly overall, with sharp
growth in automobile merchandise driven by the rapid recovery of the automotive market offsetting a weak performance in rubber merchandise. Sanyo Trading Asia Co., Ltd. (Thailand) posted gains in sales and
income thanks to solid performances in rubber, chemicals and automobile merchandise as well as lower SG&A expenses. Sun Phoenix Mexico, S.A. de C.V. achieved increased sales on the back on increased shipments of automobile merchandise but posted a year-on-year drop in operating income mainly due to higher logistics costs.
In addition, PT. Sanyo Trading Indonesia is included in the scope of consolidation starting from the current fiscal year.
As a result, the Overseas Subsidiaries segment recorded net sales of \5,813 million (up 20.8% year on year) and operating income of \364 million (up 35.8% year on year).