Showa Denko (SDK) Announces 2018 First Half Consolidated Financial Results

2018-08-10

Aug. 08, 2018 - The Group recorded consolidated net sales of ¥455,845 million in the first half of 2018, up 22.5% from the same period of the previous year. In the Petrochemicals segment, sales decreased due to a decrease in production resulting from large-scale periodic shutdown maintenance of ethylene production facilities. Though the sales in the Electronics segment decreased, the sales in the Inorganics segment considerably increased due partly to the realization of the effect of the business integration in our graphite electrode business, which took place in the second half of 2017, and the rises in the market prices of graphite electrodes. Sales in the Chemicals, Aluminum, and Others segments also increased due to higher shipment volumes.

Operating income of the Group substantially increased by 122.9%, to ¥78,084 million. Though the Petrochemicals, Electronics, and Aluminum segments recorded lower income, the Inorganics segment recorded considerably higher income due to the effect of the business integration in our graphite electrode business and the rises in the market prices of graphite electrodes. The Chemicals and Others segments also recorded higher income. The Group recorded ordinary income of ¥77,791 million, up 249.8%.

The Group recorded net income attributable to owners of the parent of ¥58,132 million in the first half of 2018, up 641.8% from the same period of the previous year, due partly to a decrease in extraordinary losses, despite an increase in corporate tax and other expenses.

In the Inorganics segment, sales increased 338.1%, to ¥116,458 million. Production of graphite electrodes in the first half of 2018 increased from the same period of the previous year due to an improvement in the situation of electric steel industry as the customer. Sales of graphite electrodes significantly increased due to consolidation of SHOWA DENKO CARBON Holding GmbH in the second half of 2017, in addition to a rise in sales prices of graphite electrodes in the global market caused by the increase in production of electric steel in China resulting from enforcement of stricter environmental policy, and the tight supply-demand situation resulting from an increase in electric steel production in global scale, especially in the US market. Sales of ceramics decreased due mainly to a fall in shipment volumes of general-purpose alumina caused by SDK’s withdrawal from PT. Indonesia Chemical Alumina, despite an increase in shipment volumes of abrasives and fine ceramics for electronics. The segment recorded operating income of ¥58,326 million, an improvement of ¥58,183 million.