During the consolidated fiscal year under review (October 1, 2023 to September 30, 2024), the global economy remained uncertain as concerns over the future persisted, mainly reflecting the Russian invasion of Ukraine, the unstable situation in the Middle East, slowing inflation in Europe and the United States and the resultant changes in the monetary policy, and the stagnation of the real estate market in China.
Taking a brief look at the regions where the Group operates, we observed an economic recovery in the United States, mainly reflecting consumer spending and capital investment. In ASEAN countries, economies remained strong with an expansion of consumer spending. In contrast, business confidence declined in China, mainly due to consumption and non-current assets.
Japan experienced an inflationary trend caused by a rise in costs for raw materials and energy. However, the economy showed an upward trend with a recovery in corporate earnings mainly due to rising domestic demand and a rebound in inbound tourism demand, which was aided by the weaker yen.
In this business environment, the Group has been striving to bolster its consolidated management structure by reinforcing its revenue base, improving its business structure, and pursuing and deepening higher value-added businesses along with SANYO VISION 2028, the long-term management plan it announced in November 2023. It has also been making ongoing efforts to strengthen the existing businesses, develop new businesses, accelerate the global expansion further, and promote new investments.
Regarding new investments, the Company invested in Yokote Yuzawa Forest Cycle Co., Ltd. as a wood biomass project. The Company also established Kitanomori Green Energy, a new company, and then signed a business transfer agreement with Hokkaido Biomass Energy. With these initiatives, the Company will also address regional issues and contribute to the realization of a smart society and the sustainable development of regional societies while also seeking to develop and provide new services.
As a new investment in next-generation fields, we entered into a domestic agency agreement and made an equity investment with Polymerize Pte. Ltd. (Singapore) as a new partner in our core materials business. This partnership supports the introduction and expansion of a cloud platform for Materials Informatics (MI) in the Japanese market. Through the provision of this platform, we aim to enhance the efficiency of materials development through machine learning technology, eliminate dependency on individual expertise in experimental data, and contribute to strengthening the international competitiveness of Japan’s materials industry and improving research and manufacturing efficiency.
For global expansion, the Company established Sanyo Trading Europe GmbH in Munich, Germany, and began operating this company in November 2023. With this company, the Company will boost sales strength, expand sales channels, and collect information in Europe as a promising market.
As an initiative to bolster its consolidated management structure, the Company established two business departments, so as to accelerate further growth in business domains that are expected to grow at a high rate. The Bio Frontier Business Department made Scrum Inc. and KOTAI Biotechnologies, Inc., which operate biotech businesses under the Life Science Business Unit, affiliates. The Energy Solution Business Department made Cosmos Shoji Co., Ltd., which operates a resource development business under the Green Technology Business Unit, an affiliate. With these initiatives, the Company will enable an accurate analysis of market trends and prompt group-wide decision-making. It will also push forward with discovering and exploiting new business opportunities and reaping harvest from them.
Consolidated results were net sales of ¥129,263 million (up 7.2% year on year), operating profit of ¥7,072 million (up 8.4% year on year), ordinary profit of ¥7,905 million (up 11.5% year on year), and profit attributable to owners of the parent of ¥5,207 million (up 8.8% year on year).
Results for each business segment are described below.
(i) Chemicals
Both sales and profit of rubber-related products remained solid due to price revisions of imported goods reflecting the even weaker yen and sales growth of high value-added secondary materials in addition to the ongoing strong demand for raw materials for domestic markets.
Sales and profit in chemical-related merchandise were positive, thanks to the good performance of mainstay products and improved profitability reflecting price revisions to incorporate surging purchase prices, which resulted mainly from the weaker yen.
In life science-related merchandise, sales and profit were both strong thanks to brisk sales of heat-releasing products, surfactants, and other mainstay products as well as the contribution of electrical materials to profit, reflecting the weaker yen.
As a result, the Chemicals segment recorded net sales of ¥40,865 million (up 6.7% year on year) and operating profit of ¥2,606 million (up 19.2% year on year).
(ii) Machinery & Industrial Products
Sales of merchandise related to industrial products were brisk, despite being partially affected by the safety testing scandal at auto manufacturers. The sold result reflected strong production at Japanese-affiliated auto manufacturers generally. However, profits declined.
In green technology merchandise (formerly called merchandise related to machinery and the environment), the delivery of the main units of feed processing machines and sales of related wearing parts were strong. In the wood biomass-related business, both sales and profit turned around as some major projects were recorded.
Both sales and profit decreased in merchandise related to scientific equipment due to rises in sales prices reflecting surging purchase prices and the weaker yen, as well as their impact on orders received.
In merchandise related to resource development handled by Cosmos Shoji Co., Ltd., sales of equipment related to geothermal heat and oil and gas-related equipment were weak, bur sales in the ocean development field remained strong. Regarding the main functional feed raw materials handled by YPTECH Co., Ltd., profit tumbled due to weak demand for mainstay products. Performance remained strong in relation to the biotech products, especially those related to genetic analysis, carried by Scrum Inc.
As a result, the Machinery & Industrial Products segment recorded net sales of ¥51,855 million (up 10.2% year on year) and operating profit of ¥4,583 million (up 3.0% year on year).
(iii) Overseas Subsidiaries
Sanyo Corporation of America earned more profit. Although sales dropped due to the reduction of the unit selling prices of high performance resins, sales of film- and automobile-related merchandise were strong. Sales and profit at SANYO TRADING (SHANGHAI) CO., LTD. declined due to the impact of production cutbacks at Japanese-affiliated auto manufacturers, which were affected by the economic slowdown. Sanyo Trading Asia Co., Ltd. (Thailand) achieved strong sales of automobile-related merchandise which contributed to profit. At Sun Phoenix Mexico, S.A. de C.V., strong sales of rubber-related and automobile-related merchandise, which were positively affected by the strong performance of Japanese-affiliated auto manufacturers, contributed to profit. At Sanyo Trading India Private Limited, rubber-related merchandise and automobile merchandise sold well. Sanyo Trading (Viet Nam) Co., Ltd. saw a strong performance with the launch of drilling fluid additives and chemicals, chemical-related merchandise, and rubber-related products. PT. Sanyo Trading Indonesia while the rubber segment remained strong, the chemicals segment underperformed, resulting in a decline in profits.
As a result, the Overseas Subsidiaries segment recorded net sales of ¥35,050 million (up 3.2% year on year) and operating profit of ¥1,748 million (up 35.7% year on year).
During the first nine months (October 1, 2023 to June 30, 2024) of the consolidated fiscal year under review, the Japanese economy rallied at a mild pace, however, recently the recovery appears to have stalled. The world economy rebounded, although the economies of some regions were weak. Looking at separate regions where the Group operates, we anticipate that the U.S. economy will continue to grow. However, it is necessary to pay attention to downside risks due to a possible cessation of decline in the inflation rate. The Chinese economy remained at a standstill although supply increased with the help of a governmental policy. Other Asian economies are generally seeing a moderate recovery.
Under such conditions, consolidated results for the first nine months under review were net sales of ¥95,946 million (up 6.4% year on year), operating profit of ¥5,877 million (up 13.1% year on year), ordinary profit of ¥7,293 million (up 30.2% year on year), and profit attributable to owners of the parent of ¥4,722 million (up 27.5% year on year).
Results for each business segment are described below.
(i) Chemicals
Sales of rubber-related products tumbled year on year although demand for raw materials remained on a recovery trend amid strong automobile production in Japan. In contrast, profit was solid after revision to sales prices of imported goods and sales growth of high value-added secondary materials.
Sales and profit in chemical-related merchandise were positive, thanks to the good performance of mainstay products and improved profitability resulting from price revisions to incorporate surging purchase prices.
In life science-related merchandise, sales and profit were both strong, reflecting brisk sales of electrical materials, surfactants and other mainstay products as well as continued buoyant performance of the new business with drilling fluid additives and chemicals.
As a result, the Chemicals segment recorded net sales of ¥30,642 million (up 4.7% year on year) and operating profit of ¥2,043 million (up 22.5% year on year).
(ii) Machinery & Industrial Products
Sales of merchandise related to industrial products were buoyant amid the strong production of affiliated Japanese auto manufacturers. However, changes in the competitive environment affected profit.
The performance of green technology merchandise (formerly called merchandise related to machinery and the environment) improved, following solid progress in the delivery of the main units of feed processing machines and in sales of related wearing parts. In wood biomass-related business, sales and profit dropped. While a large order was gained, no project for main units was recorded.
Both sales and profit decreased in merchandise related to scientific equipment due to a decrease in orders received as a result of rises in sales prices, which were primarily attributable to price hikes by manufacturers, and the weaker yen.
In merchandise related to resource development handled by Cosmos Shoji Co., Ltd., a strong performance was seen in ocean development and in oil- and gas-related equipment. Sales of equipment related to geothermal heat rallied after the end of the slow period. Regarding the main functional feed raw materials handled by YPTECH Co., Ltd., profit tumbled due to weak demand for mainstay products. Sales of biotech products handled by Scrum Inc. were bullish, mainly in the field of genetic analysis.
As a result, the Machinery & Industrial Products segment recorded net sales of ¥37,803 million (up 8.7% year on year) and operating profit of ¥3,620 million (up 1.4% year on year).
(iii) Overseas Subsidiaries
Sanyo Corporation of America earned more profit. Although sales dropped due to the reduction of the unit selling prices of high performance resins, sales of film- and automobile-related merchandise were strong. Results at SANYO TRADING (SHANGHAI) CO., LTD. declined due to the economic slowdown. At Sanyo Trading Asia Co., Ltd. (Thailand), automobile-related merchandise sold well. At Sun Phoenix Mexico, S.A. de C.V., automobile merchandise and rubber-related merchandise performed well. At Sanyo Trading India Private Limited, automobile merchandise sold well. At SanyoTrading (Viet Nam) Co., Ltd., results were strong after the launch of the new business with drilling fluid additives and chemicals. PT. Sanyo Trading Indonesia achieved healthy performance with temporary demand growth for rubber-related products.
As a result, the Overseas Subsidiaries segment recorded net sales of ¥26,353 million (up 4.1% year on year) and operating profit of ¥1,461 million (up 46.8% year on year).
During the first six months (October 1, 2023 to March 31, 2024) of the consolidated fiscal year under review, the Japanese economy rallied at a mild pace, however, recently the recovery appears to have stalled. The world economy rebounded, although the economies of some regions were weak. Looking at regions where the Group operates, we anticipate that the U.S. economy will continue to grow. However, it is necessary to pay attention to downside risks due to monetary restraint. In China, there are signs of an economic recovery supported by policies. Attention must be paid to the impact of continued stagnation in the real estate market and the continued fall of prices. Other Asian economies are generally seeing a moderate recovery.
Under such conditions, consolidated results for the first six months under review were net sales of ¥64,928 million (up 4.5% year on year), operating profit of ¥4,317 million (up 13.9% year on year), ordinary profit of ¥4,935 million (up 31.3% year on year), and profit attributable to owners of the parent of ¥3,146 million (up 24.8% year on year).
Results for each business segment are described below.
(i) Chemicals
For sales of rubber-related merchandise, automobile production in Japan was strong and demand for raw materials continued to trend toward a recovery. However, quantities did not reach the level in the same period of the previous year and sales declined year on year. Meanwhile, sales of secondary materials for high value-added merchandise grew. Profit was roughly flat from the same period in the previous year.
Regarding chemical-related merchandise, sales and profit rose year on year thanks to brisk sales of mainstay products, the introduction of new products and the improvement of profitability due to the revision of selling prices following the increase of purchase prices.Regarding life science-related merchandise, sales and profit were strong. This is a result mainly of the strong performance of electrical materials and other mainstay products and the launch of a new drilling fluid additives and chemicals business.
As a result, the Chemicals segment recorded net sales of ¥19,879 million (down 0.5% year on year) and operating profit of ¥1,255 million (up 8.5%).
(ii) Machinery & Industrial Products
Sales of merchandise related to industrial products were buoyant amid the strong production of affiliated Japanese auto manufacturers. However, changes in the competitive environment affected profit.
Results related to green technology merchandise (formerly called merchandise related to machinery and the environment) improved year on year, following progress in delivery of feed processing machines and buoyant sales of consumables related to these machines. Wood biomass-related businesses saw no orders for main units but it won an order for a large project.
Both sales and profit decreased year on year in merchandise related to scientific equipment due to a decrease in orders received as a result of rises in sales prices, which were primarily attributable to price hikes by manufacturers, and the weaker yen.
In merchandise related to resource development handled by Cosmos Shoji Co., Ltd., sales of equipment related to geothermal heat struggled in the drilling off season, while sales of oil and gas-related equipment and sales in the field of ocean development were firm. Regarding the main functional feed raw materials handled by YPTECH Co., Ltd., sales and profit were the same level as they were in the year-ago period, a reflection of weak demand for mainstay products. Performance related to the biotech products handled by Scrum Inc. was higher than in the same period of the previous fiscal year, especially in relation to genetic analysis. These strong results were due to the start of a high sales phase.
As a result, the Machinery & Industrial Products segment recorded net sales of ¥26,565 million (up 10.2% year on year) and operating profit of ¥2,759 million (up 5.1% year on year).
(iii) Overseas Subsidiaries
Sanyo Corporation of America earned more profit than in the same period of the previous fiscal year. Although sales dropped year on year due to the reduction of the unit selling prices of high performance resins, sales of film- and automobile-related merchandise were strong. Results at SANYO TRADING (SHANGHAI) CO., LTD. declined from the year-ago level due to the economic slowdown. At Sanyo Trading Asia Co., Ltd. (Thailand), automobile-related merchandise sold well. At Sun Phoenix Mexico, S.A. de C.V., automobile merchandise and rubber-related merchandise performed well. At Sanyo Trading India Private Limited, automobile merchandise sold well. Sanyo Trading (Viet Nam) Co., Ltd. achieved a turnaround, with strong sales of rubber-related merchandise and the launch of drilling fluid additives and chemicals. At PT. Sanyo Trading Indonesia, rubber products were weak.
As a result, the Overseas Subsidiaries segment recorded net sales of ¥17,704 million (up 0.6% year on year) and operating profit of ¥1,133 million (up 59.9%).
During the first three months (October 1, 2023 to December 31, 2023) of the consolidated fiscal year under review, the global economy remained uncertain, chiefly due to monetary tightening worldwide, rising geopolitical risks, such as the prolonged Russian-Ukraine war and the deteriorating situation in the Middle East, and a delayed recovery in the Chinese economy. Despite these challenges, the world economy is recovering moderately.
Looking at the regions where the Group operates, we observed firm consumer spending and housing investment, as well as an improvement in business confidence in the United States. In China, business confidence declined due to concerns over weak real estate investment and persistently high unemployment rates. Meanwhile, other Asian economies are generally seeing a moderate recovery. In Japan, the economy was improving, driven chiefly by firm consumer spending and automobile production, although inflation remained high.
Under such conditions, consolidated results for the first three months under review were net sales of ¥33,075 million (up 5.3% year on year), operating profit of ¥2,305 million (up 17.6%), ordinary profit of ¥2,233 million (up 34.0%), and profit attributable to owners of parent of ¥1,373 million (up 14.5%).
Results for each business segment are described below.
(i) Chemicals
Sales and profit in rubber-related merchandise declined from the year-ago level partly due to higher purchasing prices caused by the weaker yen, although demand for raw materials was trending toward a recovery, reflecting progress in the reduction of parts held by customers associated with improvements in automobile production in Japan.
Sales and profit in chemical-related merchandise were positive, thanks to the good performance of mainstay products, the introduction of new products, and improved profitability resulting from price revisions.
In the life science-related merchandise, both sales and profit were strong, reflecting the good performance of mainstay products, such as electric materials, films and fragrances.
As a result, the Chemicals segment recorded net sales of ¥9,964 million (down 2.5% year on year) and operating profit of ¥638 million (up 8.7%).
(ii) Machinery & Industrial Products
Both sales and profit of merchandise related to industrial products remained strong due to the recovery of production at Japanese-affiliated auto manufacturers.
Results in green technology merchandise (formerly named merchandise related to machinery and the environment) improved from the previous fiscal year, reflecting the promotion of sales of consumables related to feed processing machines and orders for large capital investment projects. Wood biomass-related businesses saw no orders for main units and performed poorly.
Both sales and profit were weak in merchandise related to scientific equipment due to a decrease in orders received as a result of rises in sales prices, which were primarily attributable to price hikes by manufacturers, and the weaker yen.
In merchandise related to resource development handled by Cosmos Shoji Co., Ltd., sales of equipment related to geothermal heat remained strong, and sales of oil and gas-related equipment and sales in the ocean development field were firm. Sales of the main functional feed raw materials handled by YPTECH Co., Ltd. were strong. Performance remained strong in relation to the biotech products, especially those related to genetic analysis, carried by Scrum Inc.
As a result, the Machinery & Industrial Products segment recorded net sales of ¥13,408 million (up 16.2% year on year) and operating profit of ¥1,464 million (up 10.6% year on year).
(iii) Overseas Subsidiaries
At Sanyo Corporation of America, film-related merchandise and automobile-related merchandise performed well. Results at SANYO TRADING (SHANGHAI) CO., LTD. declined from the year-ago level due to the economic slowdown. At Sanyo Trading Asia Co., Ltd. (Thailand), automobile-related merchandise sold well. At Sun Phoenix Mexico, S.A. de C.V., automobile merchandise performed well. At Sanyo Trading India Private Limited, rubber-related merchandise was weak. Sanyo Trading (Viet Nam) Co., Ltd.’s results were poor given the impact of a decline of the Vietnamese economy. At PT. Sanyo Trading Indonesia, rubber products were weak.
As a result, the Overseas Subsidiaries segment recorded net sales of ¥9,276 million (down 2.7% year on year) and operating profit of ¥695 million (up 71.6%).
