TOKYO — Chemical maker Asahi Kasei is expected to post a record operating profit for the April-June quarter on soaring sales of automotive plastics and firm prices of synthetic fiber materials.
This would mark the company’s first record profit for the quarter in two years. Operating profit likely rose 30% to around 38 billion yen ($340 million), beating the 33.9 billion yen consensus estimate from analysts surveyed by QUICK. Sales likely grew just under 10% to more than 450 billion yen.
Of the Tokyo-based company’s three business areas, the materials segment drove the profit growth. Shipments of high-performance engineering plastics grew on rising car production in and outside Japan. Demand for synthetic rubber used in energy-efficient tires also climbed. In addition, shipments rose of materials used in smartphones and lithium-ion battery separators.
Petrochemicals, generally prone to market price fluctuations, remained strong. Production trouble at competitors helped lift prices of acrylonitrile, a petrochemical used to make synthetic fiber. The company sew profitability improve as prices in the quarter were 60% higher than a year earlier.
Meanwhile, Asahi Kasei’s home construction business struggled as home orders slid 5% in value terms, the result of a pause in advertising following a scandal related to the installation of foundation piles. And growth in pharmaceuticals, among others in the health care segment, was sluggish.
Exchange rates, which averaged 111 yen to the dollar in the quarter, likely helped lift the company’s quarterly earnings by about 600 million yen. Asahi Kasei’s annual operating profit grows by about 800 million yen a year for every 1 yen that the Japanese currency weakens against the greenback. The company has assumed an exchange rate of 110 yen to the dollar for the year through March.
Results for the quarter are due out Aug. 3. The company may upgrade its forecast for April-September operating profit. It currently expects a 1% rise to 71.5 billion yen.
(Nikkei)