Japan’s Nagase & Co Reports Full Year Results

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Nagase & Co. Ltd (TYO:8012) for the year ended March 2013, posted domestic sales of 361 billion Yen, which was 1.2 percent year over year decline. Overseas sales for the company came in at 304.3 billion Yen, which was 14.6 percent more than the previous year. The total net sales stood at 666.27 billion, up 5.4 percent year on year.

The acquisition of Hayashibara Co. ltd and robust performance in the smartphone and tablet materials boosted the gross profit to 82.58 billion Yen up 15.3 percent on a yearly basis. From the comparative period gross profit ratio rose 1.1 points to 12.4 percent.

Operating Income

The large number of subsidiaries led to increased selling, and general and administrative expenses, resulting in increased losses among subsidiaries, which pressurized gross margins. However, fewer depreciation and amortization charges compensated a bit. Owing to which, the company posted an operating profit of 15.57 billion yen, which was up 16 percent over the last year. Ordinary income for the company came in at 17.92 billion yen up 14.3 percent yearly.

Net Income

The increase interest expenses resulting from acquiring long term fund to purchase Hayashibara lowered the effect income earned from equity in earnings of affiliates. Apart from this, the company incurred an impairment loss of 1.89 billion yen concerning the unprofitable equipments at the affiliates. Other factors affecting the profits include gain from the sale of non-current assets amounting to 3.35 billion yen and rise in deferred tax assets amounting to 1.42 billion yen concerning recoverable tax losses of Hayashibara. Owing to such factors, net income for the company came in at 14.18 billion, which was 65.5 percent more than the previous year.

Forecast for 2013

After taking into account factors like weakening Yen, improving manufacturing activities in the country etc, the company expects more positive consumer sentiment for the fiscal year 2013. Also, the company believes that business performance in ASEAN and North American region will stabilize, but due to unstable European climate, the company expects intra-union trade and exports to get adversely affected.

Owing to such factors, company expects net sales to come in at 764 billion yen, which is 14.7 percent growth yearly and gross profit of 93.4 billion yen representing 13.1 percent increase. Despite expected increase in retirement benefits for employees, company believes that increased revenues and gross profit will drive the operating profit. Therefore, operating profit is forecasted to come in at 19.2 billion yen up 23.2 percent yearly while ordinary income estimated t be around 21 billion yen up 17.1 percent yearly. Finally, net income is expected to come in at 14.5 billion yen, which is 2.2 percent increase yearly.

About the company

Japan based Nagase & Co. supplies chemical products. The company offers import, export, manufacture and sale of a variety of products. The company operates through many segments. Nagase’s chemical segment deals in dyes, pigments, information recording paper-related products, functional pigments, urethane raw materials, resin materials, fluorine chemicals and others. The electronic segment offers materials and equipment for liquid crystal displays (LCDs), semiconductor pre-processes and semiconductor assembly, as well as LCD panel members, electronic precision abrasive and others. It also has Synthetic Resin segment, Life Science segment, provides logistics, information processing and professional services.