Earnings Jump for Yushiro, Fall for Neochem


Earnings Jump for Yushiro, Fall for Neochem

Yushiro Chemical reported that its net profit more than tripled for the fiscal year ended March 31, boosted by strong performance in Japan and the Americas, while KH Neochem posted lower operating profit for its performance materials segment in the first quarter, citing the impacts of cold weather and natural gas costs.

Yushiro Chemical

Tokyo-based metalworking fluids and industrial maker Yushiro Chemical reported that its net profit for the fiscal year ended March 31 jumped 229% to ¥898 million (U.S.6.4 million), compared to ¥273 million the previous year. Operating profit for the fiscal year rose 17% to ¥1 billion, compared to ¥894 million.

The company’s fiscal year runs from April 1 through March 31.

Net sales for the 12-month fiscal year increased 24% to ¥46.8 billion.

The company noted that the impact of production adjustments due to supply shortages of parts such as semiconductors has lingered, especially in Japan, and a full-fledged recovery has not yet been achieved. Raw material prices remain at a high level, Yushiro said.

Profit for each of the company’s regional business segments is based on operating income.

In its domestic Japan market, Yushiro reported that its operating profit rebounded to ¥37 million for the fiscal year, compared to a ¥178 million loss. Sales there increased 11% to ¥1.8 billion. The company noted that although raw material prices remained at a high level in the country, sales increased due to the revision in selling prices, and Yushiro returned to a positive operating profit due to cost reductions and cost-cutting effects.

In the Americas, operating profit soared 50% to ¥305 million, and sales jumped 44% to ¥17 billion. Sales were strong at QualiChem and in Brazil, and sales prices were revised, the company said, resulting in the significant increases in sales and profits in spite of customers’ lower operating rates in the region.

In China, operating profit fell 38% to ¥256 million, while sales increased 17% to ¥6.1 billion. Despite the impact of China’s zero-COVID policy, the company said, sales recovered from the prior fiscal year, but profits declined because of the impact of increases in raw material prices.

In Southeast Asia and India, operating profit fell 31% to ¥305 million, while sales rose 27% to ¥5.7 billion. In the region, the company partially offset rising material prices through price revisions, but noted it was unable to fully absorb the raw material price increases there.

KH Neochem

Specialty chemical producer KH Neochem reported that operating profit for its performance materials segment fell 35% to ¥1.7 billion in the first quarter, compared to the same period last year. Among the factors cited as depressing profits in the segment were rising liquid natural gas costs and a temporary decline in operations due to a record-breaking cold wave in Japan.

Net sales for the segment rose 8% to ¥12.3 billion. The company noted that first-quarter sales volumes for its refrigeration lubricant raw materials remained at the same level as in the same period last year when it was strong.

The company’s specialties include oxo reactions for production of alcohols and esters. Yushiro sells derivatives, such as 2-ethylhexanoic acid and isononanoic acid, which are used as raw materials in lubricants. The company also produces fatty acids, esters and feedstocks for refrigeration compressor lubricants. Although China’s real estate market continued to slump in the first quarter, production of air conditioners recovered gradually thanks to the end of the country’s zero-COVID policy, the company noted in its earnings presentation. Demand for air conditioners in emerging countries such as India remained firm, according to KH Neochem.