February 14, 2017 | Michael Ravenscroft
DIC (Tokyo, Japan) reports net sales of ¥751.4 billion ($6.60 billion) in the calendar year 2016, down from ¥820 billion in 2015, a decrease of 8.4%. Net income in full-year 2016 was ¥54.2 billion, versus ¥51.1 billion in the previous year, an increase of 6.1%. Sales declined, although “shipments were firm,” because of “the appreciation of the yen against other major currencies,” DIC says. The increase in operating income reflects “increased sales of high-value-added products and cost reductions,” the company says. Fourth-quarter figures have not been disclosed.
The economies of North America and Europe continued to see moderate recovery, and a revival was seen in China and Southeast Asia, according to DIC. Conditions in India remained on a gentle upswing and Japan’s economy, still fragile, showed signs of a gradual rally, the company says.
Net sales of DIC’s printing inks business unit were ¥365.2 billion in 2016, a decrease of 11.5%, or down 0.7% without foreign currency effects. Operating income rose to ¥19.0 billion, a decline of 3.3%, but an increase of 8.8% without the effects of the stronger yen. Healthy shipments boosted sales of packaging inks. Foreign currency fluctuations also hindered operating income, which decreased despite being level in local currency terms, the company says.
Sales by DIC’s fine chemicals segment were ¥128.2 billion, a decrease of 5.4%, or a rise of 2.2% excluding currency impacts. Operating income rose 10%, to ¥13.1 billion, or 16.8% without the effects of exchange rates. Pigment sales in Japan were lifted by brisk shipments of functional pigments, and sales in the Americas and Europe also decreased because of foreign currency fluctuations, according to DIC.
The company’s polymer division reports 2016 sales of ¥180.9 billion, a decrease of 7%. Operating income jumped 23%, to ¥19.6 billion, or 29.6% excluding currency effects. Sales to the electrical and electronics industries were solid, sales in Japan declined as a result of falling sales prices, and overseas sales were also down, hindered by a price deterioration and by foreign currency fluctuations. The sharp increase in segment operating income was partly the result of cost reductions, DIC says.
DIC’s compounds division had 2016 net sales of ¥61.1 billion, down 3.9%, or up 3.5% excluding currency effects. Operating income fell by 13.3%, to ¥5.0 billion. Sales of polyphenylene sulfide were healthy in Japan as well as overseas, DIC says. Sales of jet inks were up overall, despite the negative impact of foreign currency fluctuations on exports. “Although these factors led to an increase in sales in local currency terms, segment sales decreased after taking foreign currency into account,” the company says.
DIC expects net sales for 2017 to rise 2.5%, to ¥770 billion, and forecasts that operating income will increase 7.0%, to ¥58 billion.