Deterioration in Chemical Market Conditions Due to Falling Crude Oil Prices and China's Slowing Economy

「Revenue fell below the same period of the previous year because lower selling prices for on-site gas supplied to steelmakers, together with weak sales of sealants and basic chemicals in the functional materials field, offset the increase in revenue from industrial gas price revisions.」

「Revenue fell below the same period of the previous year because lower selling prices for on-site gas supplied to steelmakers, together with weak sales of sealants and basic chemicals in the functional materials field, offset the increase in revenue from industrial gas price revisions.」

「The Functional Materials business faced difficult conditions as semiconductor-related products, including precision polishing pads, were affected by weak market conditions, while sales of naphthoquinone for agrochemicals remained sluggish against the backdrop of China's economic slowdown.」

「In the Functional Materials business, sales of precision polishing pads, electronic materials and other products declined in response to weaker semiconductor demand. In addition, basic chemicals weakened as a reaction to the petrochemical market's upward trend in the same period of the previous year, while functional materials for agrochemicals were affected by customer inventory adjustments, resulting in performance for the business as a whole falling well below that of the same period of the previous year.」

「The business as a whole performed steadily, offsetting the impact of lower demand for precision polishing pads, electronic materials and other products.」

「The Functional Materials business was affected by lower demand for precision polishing pads and electronic materials as inventory adjustments progressed in the semiconductor supply chain from the third quarter onward. However, sales of O-rings (sealing materials) for semiconductor manufacturing equipment and high-performance circuit products for industrial robots remained at a certain level, supported by order backlogs.」

「The functional materials business performed steadily overall, owing to progress in price adjustments in response to higher raw-material prices and increased sales of shelf-life extenders for food products, sodium acetate used as a raw material for dialysis fluids, O-rings (sealing materials) for semiconductor manufacturing equipment, magnesia for electrical steel sheets and high-performance circuit products for industrial robots.」

「In the functional materials business, sales of naphthoquinone declined due to the impact of China's lockdowns, but the business remained firm as market conditions for basic chemicals such as organic acids reached high levels in line with rising crude oil prices.」

「Overall business performance improved substantially, as sales of materials and components essential to the manufacture of semiconductors and electronic equipment, including electronic materials and precision polishing pads, expanded, while demand in the basic chemicals field recovered and market conditions improved.」

「Overall business performance was strong, with substantial progress in earnings improvement driven by increased sales of electronic materials and the recovery in demand and improvement in market conditions for basic chemicals.」

「Overall business performance improved as sales of electronic materials increased and demand recovered and market conditions improved in the basic chemicals field, which had been hit by the COVID-19 pandemic in the previous fiscal year. Segment revenue was ¥9,653 million (138.3% year on year), and operating profit was ¥997 million (396.0% year on year).」

「Revenue in this segment was ¥33,357 million, up 121.4% year on year, and operating profit was ¥1,992 million, up 148.8%.」

「Kawasaki Kasei Industries Co., Ltd. was affected in terms of sales by lower market prices and declining sales of phthalic anhydride, but remained roughly at the level of the same period of the previous year as sales of naphthoquinone recovered.」

「Kawasaki Kasei Chemicals Co., Ltd. was affected on the revenue side by lower market prices and decreased sales of phthalic anhydride. On the profit side, however, performance remained firm, supported by a recovery in naphthoquinone sales and increased sales of succinic acid for bath additives.」

「Revenue in this segment was ¥6,978 million, up 147.1% year on year, and operating profit was ¥251 million, compared with an operating loss of ¥29 million in the same period of the previous year.」

「For the Chinese production plant, where there was no prospect of resuming operations, the company decided to close the plant because its functions could be replaced by the domestic plant of 大東化学, acquired through an M&A transaction, and recorded a business restructuring loss of ¥1,277 million.」

「The functional chemicals business was affected by the continued suspension of operations at its Chinese plant due to environmental regulations and lower sales of high-performance circuit products for industrial robots. However, earnings from products for electronic materials improved through higher sales and greater efficiency at domestic production bases, allowing the business as a whole to remain solid. 川崎化成工業㈱ was affected by weaker market conditions for phthalic anhydride and a substantial decline in naphthoquinone sales, but sales of succinic acid and quinone-based pesticide active ingredients remained solid, resulting in performance at about the same level as in the same period of the previous year.」

「The functional chemicals business improved earnings through greater efficiency at domestic production sites and other measures, although the shutdown of its Chinese plant due to environmental regulations continued. Meanwhile, sales of high-performance circuit products for industrial robots declined because of U.S.-China trade friction, and the business as a whole fell below the previous year's level. Kawasaki Kasei Chemicals maintained solid sales of succinic acid and quinone-based pesticide active ingredients, but was affected by inventory write-downs following weaker market conditions for phthalic anhydride. In addition, operations at customer plants were suspended following a chemical plant explosion in China's Jiangsu Province, causing sales of naphthoquinone, a major product, to fall sharply and resulting in difficult conditions.」

「The functional chemicals business improved earnings through greater efficiency at production sites and other measures, although the shutdown of its Chinese plant due to China's environmental regulations continued. Meanwhile, sales of high-performance circuit products for industrial robots declined because of U.S.-China trade friction, resulting in lower profit for the business as a whole.」

「The Chemicals-related Business performed well, with profitability improving in the organic acids and functional chemicals fields.」

「The chemicals-related business, which is shifting its business structure toward functional chemicals, performed strongly as product market conditions recovered against a backdrop of higher crude oil prices and measures to improve the profitability of major products proved effective.」

「As a result, segment revenue was ¥18,617 million (103.0% year on year), and ordinary profit was ¥680 million (416.3% year on year).」

「As a result, segment revenue was ¥67.984 billion, up 110.8% year on year, and ordinary profit was ¥1.854 billion, compared with an ordinary loss of ¥682 million in the same period of the previous year.」

「As a result, segment revenue was ¥50,744 million, up 111.7% year on year, and ordinary profit was ¥1,109 million, compared with an ordinary loss of ¥332 million in the year-earlier period.」

「The chemicals-related business, whose performance had been sluggish, particularly in the coal tar distillation business, returned to profitability as market conditions for its products improved and structural reforms in the functional chemicals field progressed.」

「The chemicals-related business, whose performance had been sluggish, mainly in the tar distillation business, recovered faster than initially expected as product market conditions improved and structural reform progressed in the functional chemicals field.」

「Although the Chemicals-related Business is emerging from its most challenging period as foreign exchange rates and market conditions improve, we will actively pursue structural reform in functional materials and work to improve profitability in order to build a business that is resilient to changes in the operating environment.」

「Against this backdrop, although it will take some more time to stabilize operations, the chemicals-related business is emerging from the most difficult period caused by foreign exchange rates and crude oil prices.」

「The tar distillation business remained in a difficult environment, with weak global demand centered on needle coke, as well as rising prices for coking coal. Overall, the chemicals-related business faced challenging conditions. As a result, segment revenue was ¥31,414 million, or 65.2% of the year-earlier period, and ordinary loss was ¥619 million, compared with ordinary profit of ¥592 million in the same period of the previous year.」

「Meanwhile, the chemical-related business remained in a difficult environment due to deteriorating market conditions following the decline in crude oil prices, which had a strong impact from the third quarter of the previous year, as well as the effects of the slowdown in the Chinese economy.」