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[Company Information]Nitto Denko Revises Fiscal 2005 First-Half
Performance and Dividend Payout Projection
10.14.2005
Nitto Denko Group’s consolidated performance for the April 1 through September 30, 2005 period (1H/05) will be revised upward from the earlier estimate made on April 28 this year, based on the Group’s latest performance trend. This was according to Japan’s leading optical films and electronic as well as industrial materials manufacturer Nitto Denko Corporation who announced its revised financial performance and dividend payout outlook for the half-year period today.
Consolidated Performance
The revised consolidated performance outlook for 1H/05 is as shown in the table below.
Projected 1H/05 Sales of ¥298 billion far exceeds the earlier estimate by 4.7%, owing to the strong performance of the Liquid Crystal Display (LCD) Related Materials -- Nitto Denko’s mainstay business -- in addition to the Industrial Materials business. Operating Income projected at ¥42.6 billion is also higher, by 17.7%, in spite of the negative impacts of selling price erosion, thanks to increased production going hand-in-hand with higher plant operating ratio.
Projected Consolidated Financial Performance for First Half 2005
(April 1 - September 30, 2005)
(Unit:¥MM)
| Sales | Operating Income | Current Income | Net Income | |
|---|---|---|---|---|
| Earlier Projection (A) (April 28, 2005) |
284,500 | 37,000 | 36,200 | 22,500 |
| Latest Projection (B) (October 14, 2005) |
298,000 | 42,000 | 42,600 | 26,200 |
| Difference (A)-(B) | 13,500 | 5,000 | 6,400 | 3,700 |
| Inc. (Decr.) (%) | 4.7 | 13.5 | 17.7 | 16.4 |
| Reference: 1H/04 Performance |
259,210 | 37,699 | 38,812 | 21,712 |
Non-consolidated Performance
As for Nitto Denko’s non-consolidated performance figures for 1H/05, they were revised along the same line as the consolidated results, as shown in the table below.
Projected Non-consolidated Financial Performance forFirst Half 2005
(April 1 - September 30, 2005)
(Unit:¥MM)
| Sales | Operating Income | Current Income | Net Income | |
|---|---|---|---|---|
| Earlier Projection (A) (April 28, 2005) |
172,500 | 26,000 | 28,500 | 18,400 |
| Latest Projection (B) (October 14, 2005) |
179,300 | 30,200 | 35,000 | 12,700 |
| Difference (A)-(B) | 6,800 | 4,200 | 6,500 | -5,700 |
| Inc. (Decr.) (%) | 3.9 | 16.2 | 22.8 | -31.0 |
| Reference: 1H/04 Performance |
161,286 | 28,977 | 32,404 | 20,445 |
It is noted that despite the increased sales and earnings as shown in the table, impairment accounting relating to Nitto Denko’s North American subsidiary has compelled the company to revise downward the intermediate Non-consolidated Net Income projection for 1H/05.
Namely, Net Income is expected to experience a shortfall of ¥5.7 billion against the earlier projection, due to a special write-down of some ¥17 billion under the item: “Affiliate Company Stock Valuation LossE including a currency exchange impact of about ¥4.3 billion.
In the background of this revision is Nitto Denko’s decision this time to apply impairment accounting to the company’s capital investment in Nitto Americas, Inc. (NA), a fully owned subsidiary overseeing Nitto Denko’s U.S. operations. The impairment charges were necessitated because NA’s net assets had declined by roughly 50% from Nitto Denko’s original capital outlay of $218 million by the end of 1H/05, and recovery of the situation was expected to require some more time. While the impact of the impairment charges on the Non-consolidated Income is expected to be about ¥10 billion, it is not expected to affect the Group’s consolidated performance for1H/05 above.
Dividend Payout
It is Nitto Denko’s basic policy to strengthen its management groundwork as well as financial soundness and at the same time recycle its profits to the shareholders in a stable manner.Taking into consideration the smooth progress of Nitto Denko’s business and improvement of performance during the period in question in conjunction with the profit-recycling policy, Nitto Denko expects to revise the intermediate dividend for the First Half of Fiscal 2005 from the initially envisaged ¥25 per share to ¥30.
Projected Dividend Payment for First Half 2005
(April 1 - September 30, 2005)
(Unit:¥MM)
| Earlier Projection (A) (April 28, 2005) |
Latest Projection (B) (October 14, 2005) |
Reference: 1 H/04 Actual |
|
|---|---|---|---|
| Intermediate Dividend per Share | ¥25 | ¥30 | ¥25 |
(Reference)
Nitto Americas, Inc.’s subsidiaries (all 100% owned) comprise the following six companies.
| Company Name | Establishment/Acquisition Date | Major Business Acitivity |
|---|---|---|
| Hydranautics | Acquired Nov. 1987 | Manufacture & sale of polymer membranes |
| Permacel | Acquired Jul. 1988 | Manufacture & sale of industrial materials |
| Graphic Technology, Inc.Permacel | Acquired Oct. 1989 | Manufacture & sale of bar code labels. (divested in Nov. 2004) |
| Nitto Denko America, Inc. | Established Apr. 1999 | Sale of electronic materials |
| Permacel Automotive, Inc. | Acquired Dec. 2001 | Manufacture & sale of indutrial materials relating to automotives |
| Aveva Drug Delivery Systems, Inc. |
Acquired Jul. 2002 | Manufacture & sale of transdermal drug delivery patches |
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