Overview of Results for FY2021
During the fiscal year ended March 31, 2022 (April 1, 2021 – March 31, 2022), outlook for the world economy remained unstable despite glimmers of economic recovery from pandemic-induced stagnation. With the ongoing impact of logistics disruptions and semiconductor shortages already hindering economic activities, the eruption of the Russia-Ukraine conflict has caused raw material and fuel prices to surge sharply, while the depreciation of the yen has become more drastic.
Against this backdrop, the MGC Group nevertheless benefitted from constantly robust demand for semiconductor-related products reflecting market growth as well as recovery in demand for automotive-related and other products that had been heavily affected by the novel coronavirus pandemic, along with improvement in market prices for general-purpose products, such as methanol, amid rises in raw material and fuel prices.
In addition, the MGC Group launched a medium-term management plan in April 2021. In line with this plan, the Group aims to shift to a profit structure resilient to changes in the business environment. To this end, the Group is striving to:
- “Further strengthen competitively advantageous (“differentiating”) businesses,”
- “Accelerate creation and development of new businesses,” and
- “Reevaluate and rebuild unprofitable businesses.”
These efforts will help push ahead with business portfolio reforms.
The MGC Group’s net sales increased due mainly to upturns in market prices for methanol and other offerings as well as recovery in overall sales volume.
Operating profit rose, despite increases in raw material and fuel prices, lower sales volumes of optical polymers and other negative factors affecting profit. This was thanks primarily to the higher sales volumes of semiconductor-related products, recovery in demand for products that had been affected by fallout from the novel coronavirus pandemic, and rising market prices for general-purpose products.
Ordinary profit increased due primarily to higher operating profit as well as growth in equity in earnings of affiliates related to engineering plastics and overseas methanol producing companies.
Profit attributable to owners of the parent
Profit attributable to owners of the parent grew, mainly on higher ordinary profit, despite an increase in extraordinary losses reflecting such factors as the recording of an impairment loss in connection with business restructuring and other measures.
Results by Business Segment
The methanol business saw increases in both net sales and earnings due mainly to a significant upturn in market prices compared with the previous fiscal year.
Methanol and ammonia-based chemicals posted increases in net sales and earnings reflecting such factors as a rise in neopentyl glycol market prices and a decrease in repair costs, despite higher raw material prices.
High-performance products*1 posted increases in net sales and earnings thanks primarily to recovery in demand for meta-xylenediamine (MXDA), which had been affected by fallout from the novel coronavirus pandemic in the previous fiscal year, along with firm sales of aromatic aldehydes.
Xylene separators and derivatives*2 saw increase in net sales and earnings due mainly to upturns in purified isophthalic acid (PIA) market prices.
Foamed plastics posted a decrease in earnings compared with the previous fiscal year, due mainly to higher raw material and fuel prices, despite the higher sales volume of flat panel display shields and automotive materials.
- *1 MXDA, MX nylon, aromatic aldehydes and other offerings that had been previously classified as specialty aromatic chemicals
- *2 Meta-xylene, PIA and other offerings that had been previously classified as general-purpose aromatic chemicals
Inorganic chemicals posted increases in net sales and earnings thanks primarily to growth in the sales volume of chemicals for use in semiconductor manufacturing.
Engineering plastics saw increases in net sales and earnings, despite deterioration in the profitability of polycarbonates on the back of such negative factors as higher raw material and fuel prices, due mainly to robust sales of polyacetal in addition to recovery in sales volumes in automotive-related and other fields.
Optical materials posted decreases in net sales and earnings, despite recovery in optical polymer demand, which bottomed out in the first quarter. The decreases were due mainly to lower sales volume reflecting inventory adjustment carried out by customers during the first half.
Electronic materials saw increases in net sales and earnings. This was thanks mainly to robust showings of BT materials for IC plastic packaging, the core product category for electronic materials, reflecting constantly robust demand for products used in memory devices and 5G smartphones, along with higher sales volumes, especially in the first half, for general-purpose materials for a broad range of applications including PC-related devices and home appliances.
Oxygen absorbers such as AGELESS™ posted an increase in earnings, thanks mainly to recovery in domestic demand for products used for foodstuffs, achieving an improvement from the stagnation brought about by the novel coronavirus pandemic in the previous fiscal year.