NSG Announces Results for Fiscal 2010 First Half (posted 11/20/09)
NSG Group recently announced its financial results for the fiscal 2010 first half. Cumulative results for the first two quarters reflected recessionary global market conditions, though second quarter results demonstrated improvement as markets began stabilizing. NSG was able to achieve reductions in net financial debt, and the group reports that restructuring efforts are on schedule.
For the fiscal 2010 first half, the group experienced challenging conditions in all major Building Products and Automotive markets. Specialty Glass demand was hit by the strength of the yen and sluggish export markets, while the Solar Energy business is continuing with steady year-on-year volume growth. Automotive AGR enjoyed robust performance, with results consistent with the prior-year period.
Cumulative group revenues for the fiscal 2010 first half were 293 billion yen (approximately $3.3 billion), compared to 431 billion yen (~ $4.8 billion) in the fiscal 2009 first half. The operating loss (before amortization) was 7 billion yen (~ $78.3 million), vs. operating profit of 29 billion yen (~ $324.2 million) in the fiscal 2009 first half.
For the fiscal 2010 first half, Building Products revenues were 126 billion yen (~ $1.4 billion), and the operating loss (before amortization) was 4.2 billion yen (~ $47.0 million). Automotive revenues were 130 billion yen (~ $1.5 billion), and operating profit (before amortization) was 2.8 billion (~ $31.3 million). Specialty Glass revenues reached 31 billion yen (~ $346.6 million), with a break-even profit result.
For the fiscal 2010 second quarter, European Building Products market prices improved approximately 40% from the end of May. Government incentives provided significant, but temporary, stimulus to Automotive OE markets. In addition, the Specialty Glass business returned to profitability, reflecting market improvements. All business line results benefitted from cost-reduction programs.
Second quarter 2010 group revenues were 149 billion (~ $1.7 billion), up from the first quarter’s level of 144 billion yen (~ $1.6 billion). The second quarter operating loss (before amortization) was 0.6 billion yen (~ $6.7 million), compared to the first quarter operating loss of 6.4 billion yen (~ $71.5 million).
An additional 1700 employees left the group during the first two quarters, bringing the total to 6200 out of the 6700 planned reductions. The restructuring amount charged to the income statement was 6.6 billion yen (~ $73.8 million) for the first two quarters, in line with the group’s plan.
Following the significant declines of previous quarters, the group is seeing stabilizing market conditions, and business conditions are expected to remain stable or improve gradually in line with the global economy. The price increases that the Building Products business has implemented since June should contribute further to revenue and profitability. The Solar Energy business is still a key area for expansion, and NSG Group believes it is well-placed to retain its leading position within the thin-film market.
Cost-reduction programs are still expected to contribute 14 billion yen (~ $156.5 million) in savings for the financial year. The group expects that the third and fourth quarters will show slight improvement from the second quarter, with the further realization of cost savings and improvements in flat glass market prices.
For additional details, visit www.nsggroup.net.