Date and Time: 6:30-7:30 p.m. Monday, October 28, 2019
Please note that this document is not a direct transcript of the Q&A session from the conference call, but is a simple summary including additions and corrections at the discretion of the company. The results and forecasts are forward-looking statements determined by the Company based on currently available information that may include risks and uncertainties. Please be aware that actual results may vary significantly due to various factors.
The factors impacting operating profits will be:
-Sales volume | -6.0 billion yen |
-Price reduction offset by streamlining | 0.0 billion yen |
-Impact of foreign exchange | -3.0 billion yen (mainly a reactionary drop from a gain on valuation of the BS foreign exchange) |
-Recognized profit from changes in customer development associated with the contract manufacture of nucleic acid drugs | -5~-6 billion yen |
-Other, including product mix | +4.0 billion yen |
This all combined to give a loss of 10.3 billion yen. In the previous fiscal year, we recorded the above profit from the contract manufacture of nucleic acid drugs and the temporary profits from the transfer of our subsidiary engaged in the printed circuit business and foreign exchange valuation, in the amount of about 10.0 billion yen.
The factors impacting operating profits will be:
-Sales volume | +16.0 billion yen |
-Price reduction offset by streamlining | -1.0 billion yen |
-Impact of foreign exchange | -3.0 billion yen |
-Fixed costs | -2.0 billion yen (-1.4 billion yen for increase in personnel costs) |
-Other, including product mix | +1.0 billion yen |
This all combined to give a profit of 11.3 billion yen.
The factors impacting operating profits will be:
-Sales volume | +5.0 billion yen |
-Price reduction offset by streamlining | -2.0 billion yen |
-Impact of foreign exchange | -5.0 billion yen |
-Product mix | -8.0 billion yen |
-Other | -1.0 billion yen |
This all combined to give a loss of 11.2 billion yen.
The peak for the smartphone production was shifted to the first half from the usual seasonality, which had had a peak in the second half, in some customers.
The volume of sales to that customer was increased, and in addition, sales of products with higher value-added processing was increased as well. Furthermore, production for major customers has begun in Q2. The main factor is that the product mix in the sales for Information Fine Materials has improved thanks to the foregoing.
The outlook for Q3 and onward is a leveling-off for products for TVs, and decreases in products for other applications including ITO.
ITO, which has customers in slightly upper stream of the supply chain, are expected to decline significantly due to the seasonality. The forecast for the second half is relatively cautious because of the unclear inventory level of the customers who had a production peak in the first half, together with the impact of foreign exchange.
The contract manufacture of nucleic acid drugs showed steady performance as the major maintenance was completed in Q1 as planned and the equipment has been in steady operation since Q2. In addition, sales of “LONASEN® Tape,” atypical antipsychotic jointly developed with Sumitomo Dainippon Pharma Co., Ltd., were commenced in September 2019, and the drug price was higher than expected. These factors contributed to the jump in the performance in the first half. The R&D expenses for drug discovery are, at this moment, expected to be the same level as the previous fiscal year.
Although steady recovery of the economy in the second half was anticipated at the beginning of the fiscal year, the forecast was subsequently revised. We have been unable to capture demand sufficiently in this sector while some markets, as seen in the Optronics sector capturing demand, have been enlivened. Although it is difficult for us to show a clear outlook for the next fiscal year at this moment, we are working with our customer to capture their new demands.
The performance of Transportation is affected by weak production in automobiles. We are working to secure our competitiveness through such efforts as the structural reform at overseas production sites.
上班時間 (台灣時間)
8:30-17:30 (星期六、星期日與例假日除外)