Latest Financial Results (IFRS)

Consolidated Financial Results for the Second Quarter Ended September 30, 2017

In the six-month period ended September 30, 2017, conditions in the global economy proved firm due to the support of solid economic growth in both developed and emerging countries. Resource prices were likewise stable amidst bullish demand.
The Company' s net sales (JGAAP) for the six-month period ended September 30, 2017, rose year on year due to increased sales in the Metals & Coal Division, a result of higher prices and transactions volumes for coal and other resources, as well as increased sales in the Chemicals Division, a result of the new acquisition of a European chemical distributor and marketing company and higher plastic resin transactions.
Gross profit rose following higher selling prices in overseas coal businesses, increased profit in the Chemicals Division, and a rise in automobile sales volumes in overseas automobile wholesale businesses. As a result of the higher gross profit as well as an increase in share of profit of investments accounted for using the equity method associated with steel operating companies, profit for the period (attributable to owners of the Company) was up.

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(Billions of Yen)

FY2016
2Q Results
FY2017
2Q Results
Difference
Net Sales (JGAAP) 1,776.7 2,044.3 +267.6
Gross Profit 91.8 111.5 +19.7
Profit for the period attributable to owners of the Company 15.4 27.2 +11.8

Changes of Yearly Financial Results (Cumulative)

Gross Profit

Profit attributable to owners of the Company

Segment Performance [Profit for the period attributable to owners of the Company]

Segment Performance [Profit for the Period (Attributable to owners of the Company)]

(Billions of Yen)

FY2016 2Q FY2017 2Q Difference
Automotive 1.7 4.3 +2.6
Aerospace & IT Business (0.8) 0.9 +1.7
Infrastructure & Environment Business 1.5 3.6 +2.1
Energy (3.0) (4.3) (1.3)
Metals & Coal 1.0 9.5 +8.5
Chemicals 3.9 4.8 +0.9
Foods & Agriculture Business 4.1 4.3 +0.2
Retail & Lifestyle Business 4.7 2.7 (2.0)
Industrial Infrastructure & Urban Development 0.9 0.0 (0.9)
Other 1.4 1.4 0.0

Factor behind year on year change in earnings

Automotive \ 4.3 billion (up \ 2.6 billion YoY)
Increased due to higher automobile sales volumes in overseas automobile assembly and wholesale businesses
Aerospace & IT business \ 0.9 billion (up \ 1.7 billion YoY)
Improved due to absence of impairment losses on Company-owned ships recorded during the 2nd half of FY2016
Infrastructure & Environment Business \ 3.6 billion (up \ 2.1 billion YoY)
Increased due to earnings contributions from infrastructure-related businesses and higher industrial machinery transactions
Energy \ (4.3) billion (down \ (1.3) billion YoY)
Decreased due to one-time losses related to oil and gas interests
Metals & Coal \ 9.5 billion(up \ 8.5 billion YoY)
Increased due to higher prices of coal and other resources and recovery of steel market conditions
Chemicals \ 4.8 billion(up \ 0.9 billion YoY)
Increased due to new acquisition of a European chemical distributor and marketing company, higher methanol prices, and higher volume of plastic resin transactions
Foods & Agriculture Business \ 4.3 billion (up \ 0.2 billion YoY)
Increased due to firm performance of overseas fertilizer businesses
Retail & Lifestyle Business \ 2.7 billion (down \ (2.0) billion YoY)
Decreased due to absence of gain on sales of shopping centers in Japan recorded in the 1st quarter of FY2016
Industrial Infrastructure & Urban Development \ 0.0 billion(down \ (0.9) billion YoY)
Decreased as a result of fewer sites being turned over in some overseas industrial park businesses

Commodity Prices and Exchange Rates

FY2016 Results
(Apr.-Sep. '16 Avg.)
FY2017 Assumption
(Annual Avg.)
FY2017 Results
(Apr.-Sep. '17 Avg.)
Crude oil (Brent)*1 US$47.0/bbl US$50.0/bbl US$51.5/bbl
Thermal Coal *2 US$59.4/t US$77.5/t US$86.1/t
Exchange rate *3 ¥105.4/US$ ¥110.0/US$ ¥111.3/US$
*1
Impact of fluctuations in the crude oil price on earnings: A US$1/bbl change alters profit for the year (attributable to owners of the Company) by approx. ¥30 million annually.
*2
The results in the above table are cited from the GlobalCOAL NEWC Index and differ from our sales prices.
*3
Impact of fluctuations in the exchange rate on earnings: ¥1/US$ change alters gross profit by approx. ¥0.4 billion annually, profit for the year (attributable to owners of the Company) by approx. ¥0.1 billion annually, and total equity by approx. ¥1.8 billion annually.

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