As for the business environment for the Toyobo Group (hereinafter referred to as the “Group”) in the nine months ended December 31, 2017, in the global economy, the economy in the United States remained strong backed by an improvement in business circumstances for the manufacturing industry, and the economy in the Euro area picked up due largely to the expanded employment in addition to increases in production and investments. In China, the economy gradually slowed as non-current asset investments by private and state-owned companies decreased. Meanwhile, in Japan, the economy enjoyed a mild recovery based on background of firm demand both in Japan and overseas.
Amid this operating environment, the Group continued its activities aimed at becoming “The category leader, continuing to create new value that contributes to society in the environment, healthcare, and high-function products fields.” Accordingly, the Group is expanding its businesses in Japan and overseas markets through developing specialty products. Also, during the nine months under review, the Group promoted business activities in accordance with the five action plans set forth in the Medium-Term Management Plan for the four years covering the period through the fiscal year ending March 2018, namely “accelerating overseas business development,” “developing new products and creating new businesses,” “increasing competitiveness of domestic businesses,” “improving asset efficiency,” and “strengthening global Group management.”
As a result, consolidated net sales in the nine months ended December 31, 2017 decreased ¥0.6 billion (0.2%) over the same period of the previous fiscal year, to ¥241.7 billion. Operating profit increased ¥0.3 billion (2.0%), to ¥16.0 billion, ordinary profit increased ¥0.1 billion (1.1%) to ¥13.8 billion, and profit attributable to owners of parent increased ¥9.3 billion (142.8%), to ¥15.8 billion.
As for the business environment through fiscal year 2017, the economy in Japan has remained on a gradual recovery path despite the upward trend in raw material and fuel prices. Although the economy in China is slowing down, the global economy including the economy in the United States is expected to remain on an upward trend.
In view of this outlook for the operating environment, the Toyobo Group will continue to strengthen its earnings base to cope successfully with changes in the external environment. The Group aims to become "the category leader that continues to create new value that contributes to society in the environment, healthcare, and high-function products fields." The Group works for further enhancing its profitability by focusing its management resources on businesses that are profitable and have high growth potential, as it aggressively expands its business activities in Japan and overseas and improving its business portfolio, such as increasing the efficiency of its capital, strengthening its financial position, and other factors.
The Company’s consolidated performance through the third quarter is generally as initially forecast. We have made no revisions in the forecasts for the full fiscal year ending March 31, 2018, which we announced on November 9, 2017. In addition, as announced in September 22, 2017, an extraordinary income was recorded with regard to the sale of head office building.
Considering such factors, for fiscal 2017 the Toyobo Group is forecasting consolidated net sales of ¥340.0 billion (up ¥10.5 billion year on year), with operating profit of ¥25.0 billion (up ¥1.7 billion), ordinary profit of \22.0 billion (up \1.3 billion) and profit attributable to owners of parent of ¥19.0 billion (up ¥9.6 billion).
The Company’s long-term issuer rating was raised from “A－ ” to “A” by Japan Credit Rating Agency, Ltd. (JCR) as of December 28, 2017, since its earnings stability and the improved financial standing have been valued. Furthermore, the Company has also received a similar evaluation from Rating and Investment Information, Inc. (R&I), and its issuer rating was raised from “BBB+” to “A－” on January 18, 2018.
I would like to offer my most sincere appreciation to our shareholders and investors, and ask for your continued support.
President & Chief Operating Office