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Financial Highlights

Financial overview for the fiscal year ended March 31, 2013

Business performance

Net sales of the current fiscal year decreased, by 5.0% from the previous fiscal year, to \150,166 million mainly by appropriate sales price revision to respond to a fall in raw material costs. Profit increased from the previous fiscal year because of growing sales amount, cost down measurements and other factors, despite declining profit margins due to yen appreciation. As a result, operating income was \13,647 million (a 9.3% increase from the previous fiscal year), and ordinary income was \15,341 million (a 15.4% increase).

During the current fiscal year (April 1, 2016 through March. 31, 2017), Japanese economy could marginally break free of the economy leveling off mainly because export showed signs of recovery, despite a long-term stagnation in capacity investment and private consumption.? In addition, the outlook for the circumstance surrounding Japan is heading for mild recovery such as a continued economic recovery in the United States and a break in Chinese economic slowdown, despite a continued low growth in European economy.

In the chemical industry, business environment remained severe, because a continuing decline in raw material costs turned upward, the yen got weaker from the trend of the strong yen and other factors.

Under these circumstances, net sales of the current fiscal year decreased by 5.0% from the previous fiscal year, to \150,166 million mainly by appropriate sales price revision in each segment to respond to a fall in raw material costs. However, profit increased from the previous fiscal year because of growing sales amount, cost down measurements and other factors, despite declining profit margins due to yen appreciation. As a result, operating income was \13,647 million (a 9.3% increase from the previous fiscal year), and ordinary income was \15,341 million (a 15.4% increase). Profit attributable to owners of parent was \10,192 million (a 47.1% increase).

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FY2012FY2013FY2014FY2015FY2016
*2
Net sales
(Millions of yen)
142,652 165,183 167,045 157,992 150,166
Operating income
(Millions of yen)
6,186 8,110 8,944 12,486 13,647
Percentage of
operating income to net sales (%)
4.3 4.9 5.4 7.9 9.1
Ordinary income
(Millions of yen)
7,266 9,212 10,278 13,294 15,341
Percentage of
ordinary income to net sales (%)
5.1 5.6 6.2 8.4 10.2
Profit attributable to owners of parent
(Millions of yen)
4,179 4,918 5,876 6,926 10,192
Profit attributable
to owners of parent of net sales (%)
2.9 3.0 3.5 4.4 6.8
Net income per share
(yen) *1
189.46 223.01 266.44 314.13 462.28
ROE (Return on equity) 4.7 5.2 5.6 6.2 8.7
ROA (Return on assets) *3 4.8 5.7 5.9 7.5 8.5
Overseas sales
(Millions of yen)
48,799 64,228 67,905 63,914 59,807
overseas sales ratio
(%)
34.2 38.9 40.7 40.5 39.8
Cash dividends paid per share
(yen) *1
75.0 75.0 77.5 85.0 100.0
Dividend payout ratio
(%)
39.6 33.6 29.1 27.1 21.6

*1 Sanyo Chemical conducted a reverse stock split at a ratio of one share for every five shares on October 1, 2016. The figures for net income per share and cash dividends paid per share are amounts on the assumption that Sanyo Chemical conducts the reverse stock split on the beginning of previous fiscal year.
*2 Sanyo Chemical and its Japanese consolidated subsidiaries, which had mostly been using the declining balance method for depreciation of property, plant and equipment (using the straight-line method for the buildings acquired after April 1, 1998, except building facilities) adopted the straight-line method from FY2016.
*3 ROA (Return on assets) is calculated based on ordinary income.

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Financial position

The shareholder's equity ratio (net assets after deduction of minority interest to total assets) increased by 1.2 percentage points to 65.1% from 63.9% at the previous fiscal year-end. Net assets per share (after deduction of minority interest) also increased by \435.23 to \5,515.51 from \5,080.28 as of the end of the previous fiscal year.

Total assets at fiscal year-end (March 31, 2017) increased by \11,542 million compared with the previous fiscal year-end to \186,863 million. Current assets increased by \4,336 million from the previous fiscal year-end to \85,334 million mainly due to a \3,815 million increase in cash and deposits. Non-current assets increased by \7,206 million from the previous fiscal year-end to \101,529 million mainly due to a \4,886 million increase in investment securities caused by reappraisal of their market valuation and a \2,659 million increase in property, plant and equipment.

Current liabilities increased by \1,687 million from the previous fiscal year-end to \44,464 million mainly due to a \1,550 million increase in electronically recorded obligations-operating.

Long-term liabilities increased by \488 million from the previous fiscal year-end to \14,747 million mainly due to a \955 million increase in deferred tax liabilities, despite a \339 million decrease in long-term loans payable.

Net assets at fiscal year-end (March 31, 2017) increased by \9,366 million compared with the previous fiscal year-end to \127,651 million. This increase was mainly due to inflows in profit attributable to owners of parent of \10,192 million. The shareholder's equity ratio (net assets after deduction of minority interest to total assets) increased by 1.2 percentage points to 65.1% from 63.9% at the previous fiscal year-end. Net assets per share (after deduction of minority interest) also increased by \435.23 to \5,515.51 from \5,080.28 as of the end of the previous fiscal year. Sanyo Chemical conducted a reverse stock split at a ratio of one share for every five shares on October 1, 2016. The figures for net assets per share are amounts on the assumption that Sanyo Chemical conducts the reverse stock split on the beginning of previous fiscal year.

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FY2012FY2013FY2014FY2015FY2016
Current assets
(Millions of yen)
73,870 81,232 84,510 80,997 85,334
Non-current?assets
(Millions of yen)
81,567 85,296 96,519 94,323 101,529
Net?assets
(Millions of yen)
155,438 166,529 181,029 175,321 186,863
Current liabilities
(Millions of yen)
50,491 53,890 52,266 42,777 44,464
Non-current?liabilities
(Millions of yen)
10,666 8,732 11,074 14,258 14,747
Shareholders' equity
(Millions of yen)
91,290 99,161 111,827 112,019 121,603
Shareholder's equity ratio
(%)
58.7 59.5 61.8 63.9 65.1
Net assets per share
(yen) *1
4,138.6 4,496.2 5,071.0 5,080.3 5,515.5
Research and development cost
(Millions of yen)
4,511 4,659 5,515 5,622 5,443
Investment in plant and equipment
(Millions of yen)
9,899 7,497 10,520 14,333 13,500
Depreciation and amortization
(Millions of yen) *2
9,182 9,642 9,604 9,256 7,412
Number of employees 1,865 1,917 1,979 1,992 1,966

*1 Sanyo Chemical conducted a reverse stock split at a ratio of one share for every five shares on October 1, 2016. The figures for net assets per share are amounts on the assumption that Sanyo Chemical conducts the reverse stock split on the beginning of previous fiscal year.
*2 Sanyo Chemical and its Japanese consolidated subsidiaries, which had mostly been using the declining balance method for depreciation of property, plant and equipment (using the straight-line method for the buildings acquired after April 1, 1998, except building facilities) adopted the straight-line method from FY2016.

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Cash flow

At the end of the current fiscal year, cash and cash equivalents ("Cash") were \23,138 million, an increase of \3,815 million compared to the previous fiscal year-end.

Net cash provided by operating activities amounted to \20,416 million (compared to \22,625 million in net cash provided during the previous fiscal year). This result was mainly due to the cash inflow from income before income taxes and minority interests of \13,854 million, and depreciation and amortization of \7,495 million, which outweighed the outflow from the decrease in income tax payments of \3,083 million.

Net cash used in investing activities amounted to \14,198 million (compared to \13,510 million in net cash used during the previous fiscal year). This result was mainly due to a cash outlay of \13,390 million for fixed assets.

Net cash used in financing activities amounted to \1,043 million (compared to \5,493 million in net cash used during the previous fiscal year). This result was mainly due to a cash outlay of \1,984 million in dividend payments, which outweighed the cash inflow from the increase in cash to repay debt of \1,254 million.

FY2012FY2013FY2014FY2015FY2016
Operating activities
(Millions of yen)
13,293 15,769 11,518 22,625 20,416
Investing activities
(Millions of yen)
(13,413) (8,659) (8,656) (13,510) (14,198)
Financing activities
(Millions of yen)
406 (2,567) (2,922) (5,493) (1,043)
Cash and cash equivalents
at the end of the year (Millions of yen)
10,164 15,476 16,016 19,323 23,138
Outlook for the next fiscal year

For the fiscal year ending March 31, 2018, we forecast at this time net sales of \167,000 million, operating income of \14,000 million, ordinary income of \15,500 million, and profit attributable to owners of parent of \11,000 million.


Japanese economy remains at a standstill as a whole because of stagnations in private consumption and leveling-off in export situation and is expected to continue uncertain situation. Moreover, the outlook for the circumstance surrounding Japan remains unclear amid the stagnation such as a slowdown of economic expansion in emerging countries including China and a destabilization of international financial market.

For the fiscal year ending March 31, 2018, we forecast at this time net sales of \167,000 million, operating income of \14,000 million, ordinary income of \15,500 million, and profit attributable to owners of parent of \11,000 million.

In addition, the above consolidated earnings forecast assumes the price of domestically produced Naphtha at \40,000/KL and an exchange rate of \110 to US$1.

  

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