Decline in Fertilizer Sales and Production Due to Inventory Overhang Following the Fertilizer Price Surge
First written in FY2024-Q3. 3 of 5 entries say "Mitigated", first in FY2025-H1. Latest entry: FY2026.
Katakura & Co-op Agri moved to the "Worse" side of this theme in 2026.
0 other companies' latest entry also says "Materialised".
- FY2026MaterialisedAnnual report
「In the current consolidated fiscal year, ¥451 million in inventory write-downs and other charges resulting from declining profitability was recognized in cost of sales, compared with ¥138 million in the previous consolidated fiscal year.」
The risk of declining inventory values due to falling market prices for raw materials and products, among other factors, was reflected in profit or loss as an actual inventory write-down of ¥451 million. - FY2026-H1MitigatedAnnual report
「In the fertilizer business, increased sales volume resulted in revenue of ¥15,594 million, up 4.9% year on year. In terms of profit, the segment posted a loss of ¥55 million, compared with a segment loss of ¥342 million in the same period of the previous year, as the impact of trading margin losses arising from inventory factors in the previous year narrowed.」
The impact of trading margin losses attributable to distribution and fertilizer inventories in the previous year narrowed, reducing the fertilizer business's segment loss from ¥342 million to ¥55 million. However, the business remains loss-making. - FY2025MitigatedAnnual report
「In addition to the easing of the impact of trading margin losses arising from inventories held before fertilizer prices declined in the previous period, successful control of selling, general and administrative expenses resulted in segment profit of ¥55 million, compared with a segment loss of ¥1,245 million in the same period of the previous year.」
The loss impact of inventories held before fertilizer prices declined, which became apparent in the previous fiscal year, eased, and the fertilizer business turned from a segment loss to a profit. - FY2025-H1MitigatedAnnual report
「In the fertilizer business, sales volume increased due to the clearance of some distribution inventories and rush demand ahead of fertilizer price increases in June. However, the substantial fertilizer price cuts since June of the previous year resulted in sales of ¥14,609 million, down 3.7% year on year. On the profit side, although performance improved year on year, the business recorded a segment loss of ¥316 million due to weak underlying demand and other factors, compared with a loss of ¥397 million in the year-earlier period.」
The inventory overhang risk that became apparent in the previous fiscal year was partially reduced as some distribution inventories were cleared and sales volume increased, but the business remained loss-making due to weak end demand and falling prices. - FY2024-Q3MaterialisedAnnual report
「During the nine-month period of the current consolidated fiscal year, production, orders received and sales decreased substantially. This was mainly because, in the fertilizer business, the reduction of distribution inventories that had increased due to rush demand and other factors in the previous fiscal year had not progressed as expected.」
The reduction of distribution inventories that had increased due to rush demand ahead of fertilizer price increases in the previous fiscal year was delayed, and production, orders received and sales decreased substantially, according to the disclosure.