Showa Denko Revises Forecast of Consolidated Performance and Records Extraordinary Loss
TOKYO, Aug 3, 2021 – (JCN Newswire) – Showa Denko (SDK; TSE:4004) announces that it revises its forecast of consolidated business results for the first half of the year ending on December 31, 2021 and that for the full year ending on December 31, 2021, both of which were announced on July 8, 2021. SDK also announces that it will record extraordinary loss.1. Revision of forecast of consolidated business results for January 1 – June 30, 2021(1) Revised forecast of consolidated business results for January 1 – June 30, 2021Please see www.sdk.co.jp/assets/files/english/news/2021/20210803_sdknewsrelease_e.pdf(2) Reasons for the revisionNet sales hovers around the level of the previous forecast. However, operating incomes of all segments except the Others segment are expected to increase. Especially in the Showa Denko Materials segment, operating income is expected to increase due to a continuously tight supply-demand situation regarding its semiconductor related business. Also in the Petrochemicals segment, operating income is expected to increase due to higher-than-expected product prices resulting from a rise in raw naphtha price. As a result, our ordinary income is expected to show almost as much increase as that in our operating income. However, net income attributable to owners of the parent is expected to show slight improvement because we expect an increase in the extraordinary loss of about 10 billion yen.Major factors of the expected extraordinary loss to be recorded are loss on sale of two businesses of the Aluminum segment, which was announced on January 28, 2021, amounting to about 2.5 billion yen and impairment loss in fixed assets of Showa Denko Materials segment’s mobility business amounting to 3.5 billion yen.2. Revision of forecast of consolidated business results for January 1 – December 31, 2021(1) Revised forecast of consolidated business results for January 1 – December 31, 2021Please see www.sdk.co.jp/assets/files/english/news/2021/20210803_sdknewsrelease_e.pdf(2) Reasons for the revisionIn the Petrochemicals segment, net sales are expected to increase due to higher-than-expected prices of major products including ethylene resulting from a rise in raw naphtha price. In the Inorganics segment, net sales are expected to increase due to an increase in the sales volume of graphite electrodes resulting from tight supply-demand situation. In the Showa Denko Materials segment, net sales are expected to increase due to tight supply-demand situation in the semiconductor related business which is expected to continue into the second half of this year.Operating incomes are expected to increase in all segments except the Others segment, centering on the first half of 2021. As a result, our ordinary income is expected to show almost as much increase as that in our operating income. However, net income attributable to owners of the parent is expected to decrease due to recording of extraordinary loss.3. Recording of extraordinary lossIn the first half of this year, SDK will record a loss on sale of two businesses of the Aluminum segment, which was announced on January 28, 2021, amounting to about 2.5 billion yen and an impairment loss in fixed assets of Showa Denko Materials segment’s mobility business amounting to 3.5 billion yen. In addition, in the second half of this year (July 1 – December 31), SDK expects that the Showa Denko Materials Segment will record additional cost of improvement in its business structure amounting to about 15 billion yen. About Showa Denko K.K.Showa Denko K.K. (SDK; TSE:4004, ADR:SHWDY) is a major manufacturer of chemical products serving from heavy industry to computers and electronics. The Petrochemicals Sector provides cracker products such as ethylene and propylene, the Chemicals Sector provides industrial, high-performance and high-purity gases and chemicals for semicon and other industries, the Inorganics Sector provides ceramic products, such as alumina, abrasives, refractory/graphite electrodes and fine carbon products. The Aluminum Sector provides aluminum materials and high-value-added fabricated aluminum, the Electronics Sector provides HD media, compound semiconductors such as ultra high bright LEDs, and rare earth magnetic alloys, and the Advanced Battery Materials Department (ABM) provides lithium-ion battery components. For more information, please visit www.sdk.co.jp/english/.For further information, contact:Showa Denko K.K., IR Office, Finance & Accounting Department, Tel: 81-3-5470-3323 Copyright 2021 JCN Newswire. All rights reserved. www.jcnnewswire.com
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