Asahi Glass Co. recently posted financial results for the fiscal year ending December 31, 2014. During 2014, the global economic environment surrounding the company and its consolidated subsidiaries remained on a gradual recovery track. Specifically, while economic growth decelerated in China and other emerging markets, business conditions in Europe picked up and consumer spending in the U.S. maintained its stability. In Japan, the economy made a gradual recovery as business confidence was restored due to economic measures taken by the government, as well as other factors.
Under such a business environment, the AGC group posted net sales of ¥1,348.3 billion (~ $11.2 billion), a ¥28.3 billion (~ $236.2 million) or 2.1% increase from the previous fiscal year thanks to increased shipments of glass products, centering on automotive glass, and chemicals, as well as the continued depreciation of the yen. However, the group was also affected by sales price declines in the LCD glass substrate business and the architectural glass business in Eastern Europe, price increases of fuels and raw materials, and reduced profitability of foreign subsidiaries due to the weak yen. As a result, operating profit decreased by ¥17.8 billion (~ $148.6 million) or 22.2% year-on-year to ¥62.1 billion (~ $518.4 million), and profit before tax decreased by ¥ 3.2 billion (~ $26.7 million) or 7.3% to ¥41.2 billion (~ $343.9 million). Profit for the year attributable to owners of the parent was ¥15.9 billion (~ $132.7 million), a ¥0.2 billion (~ $1.6 million) or 1.4% decrease on a year-on-year basis.
In the flat glass business, shipments of architectural glass increased from the previous fiscal year in all regions. Sales prices as a whole remained stable, while price levels remained below the levels of the previous fiscal year in Eastern Europe. Sales of architectural glass increased on a year-on-year basis, as it was also affected by the weak yen. In the automotive glass business, the AGC group’s shipments increased, as auto production as a whole remained robust despite decreases in some regions. Sales increased on a year-on-year basis, reflecting the weak yen and the increased shipments. As a result, net sales from the glass operations for the fiscal year were ¥712.7 billion (~ $5.9 billion), up ¥45.4 billion (~ $37.6 million) or a 6.8% increase from the previous fiscal year. Operating profit/loss improved by ¥13.6 billion (~ $113.5 million) year-on-year to post a profit of ¥0.6 billion (~ $5.0 million), mainly due to the effects of structural reforms in the European architectural glass business, in addition to increased sales of architectural and automotive glass.
Shipments of LCD glass substrates and specialty glass for display applications increased from the previous fiscal year; however, their sales prices decreased. Shipments of plasma display panel products decreased significantly as major customers terminated display panel production. Regarding electronic materials, shipments of both optoelectronics materials and semiconductor products increased from the previous fiscal year. As a result, net sales from the electronics operations for the fiscal year were ¥297.7 billion (~ $2.5 billion), down ¥ 48.3 billion (~ $403.2 million) or 14.0% from the previous fiscal year. Operating profit was ¥36.2 billion (~ $302.2 million), down ¥37.9 billion (~ $316.4 million) or 51.1% from the previous fiscal year due to the price decline in the LCD glass substrate business and the reduction of profitability of foreign subsidiaries affected by the progress of the weak yen.