Latest Financial Results (IFRS)

Consolidated Financial Results for the Third Quarter Ended December 31, 2017

In the nine-month period ended December 31, 2017, conditions in the global economy proved firm due to the support of growth in developed countries witnessing increased consumption and in emerging countries in which markets were buoyed by the growth in developed countries. Resource prices were likewise solid amidst bullish demand.
The Company’s net sales (JGAAP) for the nine-month period ended December 31, 2017, were up year on year due to increased sales in the Retail & Lifestyle Business Division, a result of higher tobacco transactions volumes; in the Chemicals Division, a result of the benefits of the new acquisition of a European chemical distributor and marketing company and higher plastic resin transaction volumes; and in the Metals & Coal Division, a result of rises in prices and transactions volumes for coal and other resources.
Gross profit grew thanks to higher selling prices in overseas coal businesses, a rise in automobile sales volumes in overseas automobile wholesale businesses, and increased sales in the Chemicals Division. Profit for the period (attributable to owners of the Company) was up 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 a steel-related operating company.

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(Billions of Yen)

FY2016
3Q Results
FY2017
3Q Results
Difference
Net Sales (JGAAP) 2,749.3 3,139.4 +390.1
Gross Profit 142.1 168.9 +26.8
Profit for the period attributable to owners of the Company 30.1 44.8 +14.7

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 3Q FY2017 3Q Difference
Automotive 2.5 6.0 +3.5
Aerospace & IT Business 0.6 1.1 +0.5
Infrastructure & Environment Business 2.5 5.6 +3.1
Energy 0.0 (2.7) (2.7)
Metals & Coal 4.6 15.1 +10.5
Chemicals 5.6 6.9 +1.3
Foods & Agriculture Business 5.3 4.6 (0.7)
Retail & Lifestyle Business 6.5 4.3 (2.2)
Industrial Infrastructure &
Urban Development
0.7 0.5 (0.2)
Other 1.8 3.4 +1.6

Factor behind year on year change in earnings

Automotive ¥6.0 billion (up ¥3.5 billion YoY)
Increased due to higher automobile sales volumes in overseas automobile assembly and wholesale businesses
Aerospace & IT business ¥1.1 billion (up ¥0.5 billion YoY)
Impairment losses recorded on Company-owned ships during the second half of FY2016
Infrastructure & Environment Business ¥5.6 billion (up ¥3.1 billion YoY)
Increased due to earnings contributions from infrastructure- related businesses and higher volume of industrial machinery transactions
Energy ¥(2.7) billion (down ¥(2.7) billion YoY)
Decreased due to one-time losses related to oil and gas interests
Metals & Coal ¥15.1 billion (up ¥10.5 billion YoY)
Increased due to higher prices of coal and other resources, in addition to recovery of steel market conditions
Chemicals ¥6.9 billion (up ¥1.3 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 ¥4.6 Billion (down ¥(0.7) billion YoY)
Decreased due to declines in sales volumes in overseas fertilizer businesses
Retail & Lifestyle Business ¥4.3 billion (down ¥(2.2) billion YoY)
Decreased due to absence of gain on sales of shopping centers in Japan recorded in the first quarter of FY2016
Industrial Infrastructure & Urban Development Business ¥0.5 billion (down ¥(0.2) billion YoY)
Decreased as a result of fewer lot sales in some overseas industrial park businesses

Commodity Prices and Exchange Rates

FY2016 Results
(Apr.-Dec. '16 Avg.)
FY2017 Assumption
(Annual Avg.)
FY2017 Results
(Apr.-Dec. '17 Avg.)
Crude oil (Brent)*1 US$48.4/bbl US$50.0/bbl US$54.8/bbl
Thermal Coal *2 US$71.1/t US$77.5/t US$91.0/t
Exchange rate *3 ¥107.3/US$ ¥110.0/US$ ¥111.8/US$
*1
Fluctuations in the crude oil price do not have significant effect on FY2017 earnings.
*2
The results in the above table are cited from the GlobalCOAL NEWC Index and differ from our sales prices.
*3
Impact of exchange rate fluctuations on earnings: A ¥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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