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1. Business Results
(Consolidated)
For the fiscal year ended March 31, 2002, net sales (total trading transactions)
decreased 15.6% to ¥5,464.5 billion, down ¥1,009.9 billion from
the previous year, owing to the Company's reorganization of business portfolios,
withdrawal from low-margin transactions with low capital efficiency and
reforms to the revenue structure by focusing on core businesses.
Gross trading profit decreased 7.6% (¥21.9 billion)
to ¥265.8 billion mainly from the transfer of the non-ferrous products,
textiles and LNG businesses to affiliates under the equity method in accordance
with the Alliance Strategy, while the gross profit margin improved 0.42
percentage point to 4.86%. With a reduction in selling, general and administrative
(SG&A) expenses of ¥9.1 billion, operating income totaled ¥49.5
billion after a decline of 20.6% (¥12.8 billion). While a decline in
operating income was offset by improvements of ¥3.5 billion in net interest
expense, ¥1.5 billion in dividend income, and ¥7.0 billion in equity
in gain of unconsolidated subsidiaries and affiliates, recurring profit
declined 14.9% (¥5.9 billion) to ¥33.2 billion from a decline in
other income. An extraordinary gain of ¥56.3 billion was recorded from
gains on transfer associated with integrating the LNG and chemical products
businesses. Nonetheless, a ¥79.5 billion extraordinary loss from a valuation
loss on marketable securities listed and a transitory loss associated with
changing pension plans forced the Company to further bolster its financial
position. Consequently, income before income taxes was ¥10.0 billion
and net income was ¥1.2 billion, due to income taxes and minority interests
in consolidated subsidiaries of ¥8.8 billion.
2. Outlook for the Fiscal Year Ending March 31,
2003 (Consolidated)
Despite overseas sales growth following a recovery in the U.S. economy,
transactions are anticipated to decrease from the spin-off of the steel
products business and the application of the equity method to consolidated
subsidiaries along with the reorganization of business portfolios in the
chemical products and real estate businesses. As a result, the Company forecasts
a 10.3% (¥564.5 billion) decrease in consolidated net sales to ¥4,900.0
billion.
Gross trading profit is expected to rise in overseas
operations as well, but projections call for a 5.8% (¥15.3 billion)
decline to ¥250.5 billion from application of the equity method to consolidated
subsidiaries.
SG&A expenses are anticipated to fall 7.8% (¥16.8 billion) to ¥199.5
billion owing to such measures as reforming the pension plan and streamlining
consolidated subsidiaries. Operating income is forecast to rise 3.0% (¥1.5
billion) to ¥51.0 billion.
While an improvement is expected in profits of affiliates
under the equity method, other expenses are forecast to increase 28.8% (¥4.7
billion) to ¥21.0 billion following waning dividends from overseas companies.
In aggregate, recurring profit is estimated to decline
9.6% (¥3.2 billion) to ¥30.0 billion, while net income is predicted
to rise from ¥1.2 billion to ¥8.0 billion.
These projections are based on the premise of a yen
to U.S. dollar exchange rate of ¥125 per US$1 and average crude oil
prices of US$23.00/bbl (Dubai).
The above forecast is based on rational conclusions drawn from information
available to management at the time of reporting. However, actual results
may vary depending on external factors such as economic conditions of the
markets in which the Company operates, exchange rate fluctuations, etc.
3. Financial Position
Consolidated Balance Sheet
Consolidated total assets for the fiscal year declined ¥656.4 billion
to ¥2,957.6 billion as a result of stringent selection of investment
and finance projects, withdrawal from low-margin transactions and reorganization
of business portfolios.
Total shareholders' equity fell ¥13.6 billion to
¥106.7 billion from an increase in unrealized losses on available-for-sale
securities stemming from the stagnant stock market.
Consequently, total shareholders' equity ratio improved
0.3 percentage point to 3.6%.
Consolidated Cash Flows
Cash and cash equivalents (hereafter referred to as "cash") declined ¥117.1
billion to ¥157.8 billion through pursuit of measures to reduce financial
assets as well as investments and loans in line with the Medium-Term Management
Plan 2002 and drastic reduction in interest-bearing debt. |
