Ceramic Industry

Asahi Struggles in 2nd Qtr; Net Sales Down Nearly 30% (posted 8/18/09)

August 18, 2009

In the second quarter of 2009, the AGC Group posted net sales of 280.2 billion yen (approximately $2.9 billion), a 29.4% decrease compared to the corresponding period of the previous year; operating income of 13.4 billion yen (~ $139.8 million), a 75.8% decrease year-on-year; ordinary income of 19.8 billion yen (~ $206.6 million), a 65.9% decrease year-on-year; and a net loss of 8.2 billion yen (~ $85.6 million).

Sales in the flat glass business decreased year-on-year. In Europe, despite the weak demand and lower prices than in the previous year, the AGC Group has been trying to restore prices mainly in Russia. In Japan and North America, the construction sector’s continuing weak demand caused the decrease of shipments. In Asia, shipments remained slow in general, but some countries saw demand improve. In the second quarter, shipments of glass for solar power systems, which had dropped since the end of the previous year, recovered to the same level as in the corresponding period of the previous year, partly because of support by government policies in some countries.

In the automotive glass business, sales decreased from the corresponding period of the previous year owing to a decline in auto production in North America, Europe, Japan and Asia. As a result, net sales from the Glass operations for the second quarter were 130.6 billion yen (~ $1.4 billion), a 35.6% decrease year-on-year, and the operating loss was 13.4 billion yen (~ $139.8 million).

In Electronics and Display Operations, while sales in the display business dropped year-on-year, AGC Group’s shipments recovered following a rebound of demand for glass substrates for flat panel displays (FPDs). In the electronics materials business, sales deteriorated year-on-year because the division’s overall shipment volume was low due to the continuing weak demand.

As a result, net sales from the Electronics and Display operations for the second quarter was 88.7 billion yen (~ $925.6 million), a 16.8% decrease year-on-year, and operating income was 29.3 billion yen (~ $305.7 million), a 26.4% decrease year-on-year.

In the ceramics business, both the glass engineering sector and the environmental energy sector saw a decline in demand. As a result, net sales from the Other operations for the second quarter was 17.0 billion yen (~ $177.4 million), a 19.1% decrease year-on-year, and operating income was down by 87.4% year-on-year.

In 2009, the global economy still remains uncertain and is not expected to make a full-fledged recovery, though there are some signs of recovery. Under such circumstances, in the Glass operations, the AGC Group forecasts that shipments of flat glass will continue to be low in North America, Europe, Japan and Asia throughout the year. Shipments of automotive glass are also estimated to remain sluggish, but will likely improve gradually in the second half.

Additional details are available at www.agc.co.jp/english.

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