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Investment Bridge Announces Investment Opinion: Bridge Report on ZEON CORPORATION: FY3/13 Earnings Weaker, But Estimates Call for Rise in Both Sales, Profits in FY3/14

2013年06月21日 PM09:55
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TOKYO

Investment Bridge, one of Japan’s leading independent IR services companies, has released a “Bridge Report” on ZEON CORPORATION (TOKYO:4205) reviewing its fiscal year March 2013 earnings results.

Report Highlights

  • Despite ZEON’s efforts to reduce costs, declines in product volume and pricing contributed to lower sales and profits in FY3/13.
  • During FY3/14, ZEON’s earnings estimates call for both sales and profits to rise for the first time in three terms due to continued favorable trends in the specialty material business, and increases in sales volumes of synthetic rubber and other products in the elastomer business.
  • The Bridge Report calls attention to the relatively conservative assumptions for earnings estimates in FY3/14 and potential for positive surprises in earnings based on trends in pricing and fluctuations in foreign exchange rates.

ZEON CORPORATION is a petrochemical manufacturer that boasts of numerous products with large shares of global markets, including synthetic rubber used in automobile parts and tires, and synthetic latex used in medical gloves. The Company’s strengths include its creative technology development function, research and development structure, and high earnings generation capability. The ZEON Group is comprised of the parent company, 43 subsidiaries and eight affiliated companies. The Company operates manufacturing facilities in five locations in Japan and eight overseas.

Growth in sales and profits of the specialty material business coupled with favorable demand was not enough to overcome declines in sales and profits of the elastomer business due to overall weak market conditions. Consequently, consolidated net sales and operating income declined by 4.6% and 26.2% year-over-year to JPY250.7 and JPY23.6 billion respectively during FY3/13.

During FY3/14, the elastomer business is expected to see sales growth combined with strong demand for general use rubber for tires from the Japanese automobile industry, but the potential for higher raw materials costs and other costs are expected to lead to a decline in operating income. The recovery that started in the latter half of the current term based on favorable demand for optical film for television applications is expected to continue and allow specialty material business sales and operating income to rise in the coming term. Consequently FY3/14 consolidated net sales and operating income are expected to rise by 15.6% and 13.9% year-over-year to JPY290 and JPY27 billion respectively, marking the first increase in both sales and profits in three terms. A full year dividend of JPY13 per share is expected in FY3/14 for a JPY1 per share increase over the previous term and the fourth consecutive term of increases in dividends.

At the same time, the Bridge Report highlights ZEON’s adoption of relatively conservative earnings estimates, progress in the implementation of the Midterm Management Plan “SZ-20″ and timing of when synergies in the acrylic rubber business arising from the acquisition of TOHPE will be realized.

To view the full report, please go to the website at the URL listed below.
http://www.bridge-salon.jp/report_bridge/archives/eng/4205/20130621.html

About Bridge Report:
Bridge Report is produced by Investment Bridge Co., Ltd. and provides accurate and objective information about the earnings, business strategies, and other information of publicly traded Japanese companies.

CONTACT

Investment Bridge Co., Ltd.
Kaoru Hosaka for ZEON CORPORATION
+81-3-5842-5765
(Japanese correspondence only)
zeon@cyber-ir.co.jp
(English and Japanese correspondence)

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