Profits Up for Yushiro, KH Neochem

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Profits Up for Yushiro, KH Neochem

Yushiro Chemical reported increased fiscal-year net profit and sales for the quarter ended March 31, while specialty chemical producer KH Neochem posted higher operating profit and sales revenue for its performance materials segment for the quarter ended March 31, citing higher selling prices.

Yushiro Chemical
Metalworking fluids and industrial oil manufacturer Yushiro Chemical reported that net profit for the fiscal year ended March 31 surged 235% to ¥3 billion (U.S. $19 million), compared to ¥898 million for the fiscal year ended in March 2022. Fiscal-year operating profit also jumped, by 245%, to ¥3.6 billion.

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

Net sales for the 12-month fiscal year were up 13% at ¥53 billion, compared to ¥46.8 billion.

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

In its home market of Japan, Yushiro said operating profit skyrocketed 1,477% to ¥592 million for the fiscal year, compared to ¥37 million. Domestic market sales increased 9% to ¥19.6 billion. The company said sales volume remained the same as in the previous fiscal year. Although the prices of some raw materials rose at the end of the fiscal year, sales and profits increased due in part to the impact of sales price revisions for the remaining raw materials from the prior fiscal year.

In the Americas, operating profit jumped 187% to ¥2.6 billion, compared to ¥916 million. Sales increased 22% to ¥20.7 billion. Sales were strong, mainly in North America, the company said. Sales recovered rapidly even at locations that had been affected by lower customer utilization rates in in the previous fiscal year. Sales prices also progressed at each location, Yushiro pointed out, resulting in a significant increase in sales.

In China, operating profit fell 15% to ¥218 million, while sales decreased 1% to ¥6.1 Billion. Sales did not grow, and sales revenue declined as Japanese automakers struggled against the backdrop of the rapid shift to electric vehicles in China, the company noted. Efforts to improve profitability helped lead to a small decrease in profit for the fiscal year, after an operating deficit in the first half of the fiscal year.

In Southeast Asia and India, operating profit surged 113% to ¥651 million, from ¥305 million. Sales rose 17% to ¥6.6 billion. Sales were steady at each location in the region due to a recovery in customer occupancy rates. The company added that some locations progressed in revising customer sales prices – which couldn’t be implemented in the previous fiscal year – resulting in increased sales and profits.

KH Neochem
KH Neochem reported operating profit of ¥2.3 billion for its performance materials segment in the first quarter, a 35% jump from ¥1.7 billion. The company in its earnings presentation said the operating profit increase occurred as higher fixed manufacturing and logistic costs were reflected in selling prices.

The segment’s net sales increased 2% to ¥12.3 billion. The company noted that while sales volume was somewhat sluggish, its main products for air conditioner lubricants remained steady.

KH Neochem’s specialties include oxo reactions for production of alcohols and esters. The company 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.

The company noted in its earnings briefing that air conditioner production picked up during the first quarter for the high-demand summer season, and demand is expected to recover with the addition of demand from emerging countries.