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| Friday, 12 February 2021, 10:00 HKT/SGT | |
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TOKYO, Feb 12, 2021 - (ACN Newswire) - Showa Denko (SDK; TSE: 4004) announces that it revises its forecast of consolidated business results for the year ending on December 31, 2020, which was announced on August 12, 2020, taking the latest economic conditions into consideration. SDK also announces that it will record losses due to impairment (extraordinary losses) in its 2020 consolidated financial statements.
1. Revision of forecast of consolidated business results for January 1 - December 31, 2020
(1) Revised forecast of consolidated business results for January 1 - December 31, 2020
* See www.sdk.co.jp/assets/files/english/news/2021/20210212_sdknewsrelease_e.pdf
(2) Reasons for the revision
Our forecast for net sales remains at the same level of the previous forecast. We expect that operating income of the Inorganics segment will decrease due to a reduction in sales volumes and market prices of graphite electrodes. However, we expect that, in the Showa Denko Materials segment, operating income earned by the sales of electronics materials and circuit board materials will increase due to the market growth resulting from expansion of data centers and other electronics related markets. Operating income of the Petrochemicals segment will increase due to an improvement in supply-demand situation in Asia and an increase in prices of products resulting from a rise in raw naphtha price. On the whole, we expect an improvement in the Group's consolidated operating income.
On the basis of the situation above, we also expect improvements in ordinary income and net income attributable of owners of the parent from those in the previous forecast.
With regard to the dividend, we announced on December 25, 2020 that we expect the Company will pay 65 yen per share as year-end dividend.
2. Recording of impairment loss (extraordinary loss)
Our aluminum rolled products business, which is operated in Sakai Ward, Sakai City, and our ceramics business, which is operated in Shiojiri City, Nagano Prefecture, has been showing a decline in profitability. Therefore, we reevaluated these businesses, taking their business outlook into consideration, and have decided to declare impairment of our aluminum rolled products business and ceramics business. We also have decided to declare impairment of assets which are owned by SDK or its consolidated subsidiaries and have become unprofitable or gotten out of use.
As a result, we will record impairment losses (extraordinary losses) amounting to about 16.1 billion yen for the 4th quarter of 2020 (The total impairment loss for full year 2020 will be 16.6 billion yen).
(1) Impairment loss in the aluminum rolled products business
Our aluminum rolled products business, which we operate in Sakai Ward, Sakai City, has been showing a decline in profitability. Therefore, we reevaluated the business, taking its business outlook into consideration, and have decided to declare devaluation of fixed assets of the business to the level where we can recover our investment, and will record an extraordinary loss of 8.8 billion yen in the Company's 2020 financial statements.
(2) Impairment loss in the ceramics business
Our ceramics business, which we operate in Shiojiri City, Nagano Prefecture, has been showing a decline in profitability. Therefore, we reevaluated the business, taking its business outlook into consideration, and have decided to declare devaluation of fixed assets of the business to the level where we can recover our investment, and will record an extraordinary loss of 6.2 billion yen in the Company's 2020 financial statements.
Reference: Segment-wise breakdown of net sales and operating income (consolidated)
* See www.sdk.co.jp/assets/files/english/news/2021/20210212_sdknewsrelease_e.pdf
About Showa Denko K.K.
Showa Denko K.K. (SDK; TSE: 4004, ADR: SHWDY) is a major manufacturer of chemical products serving heavy industry to computers and electronics. Our Petrochemicals segment provides cracker products such as ethylene and propylene; Chemicals provides high-performance gases and chemicals to semicon and other industries; Inorganics provides ceramic products: alumina, abrasives, refractory/graphite electrodes and fine carbons. Aluminum provides aluminum materials and high-value-added fabricated aluminum; Electronics provides HD media, compound semiconductors such as ultra high-bright LEDs and rare earth magnetic alloys; Advanced Battery Materials (ABM) provides lithium-ion battery components. Please visit us at www.sdk.co.jp/english/.
For further information, contact:
Showa Denko K.K., IR Office, Finance & Accounting Department, Tel: 81-3-5470-3323
Topic: Press release summary
Sectors: Chemicals, Spec.Chem
https://www.acnnewswire.com
From the Asia Corporate News Network
Copyright © 2024 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.
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