Investment Bridge Announces Investment Opinion: Bridge Report on ZEON CORPORATION Issued: Strong Earnings Growth Recorded in FY3/14, Estimates Call for Mixed Earnings in FY3/15
TOKYO--(BUSINESS WIRE)--Investment Bridge, one of Japan’s leading independent IR services companies, has released a “Bridge Report” on ZEON CORPORATION (TOKYO:4205) reviewing its earnings results for full fiscal year March 2014.
“information technology trends and the spread of the information society”
- Sales and operating income rose by 18.2% and 26.2% year-over-year to JPY296.4 and JPY29.9 billion due in part to increases in sales of all business segments, and a large improvement in profitability of the specialty material business due to strong demand for optical film applications.
- Zeon Corporation FY3/15 earnings estimates call for sales to rise by 4.6% year-over-year to JPY310.0 billion. However, operating income is expected to decline by 16.4% year-over-year to JPY25.0 billion due in part to weak demand from optical film applications.
- The Bridge Report highlights Zeon’s efforts to raise profitability under the direction of the New Midterm Management Plan "SZ-20 Phase II."
ZEON CORPORATION is a petrochemical manufacturer that maintains numerous products with large shares of global markets, including synthetic rubber used in automobile parts and tires, and synthetic latex used in medical gloves. The Company’s strengths include its innovative technology development function, research and development structure, and high earnings generation capability. The ZEON Group is comprised of the parent company, 57 subsidiaries and 10 affiliated companies. The Company operates manufacturing facilities in various locations in Japan and in overseas markets.
Increases in sales of all business segments allowed total sales to grow by 18.2% year-over-year to JPY296.4 billion. At the same time, operating income rose by 26.2% year-over-year to JPY29.9 billion due in part to higher capacity utilization rates resulting from increased production of optical film related products. Non-operating income improved by JPY1.1 billion from the previous term due in part to foreign exchange translation gains of JPY600 million, and declines in marketable securities valuation losses, allowing both ordinary and net incomes to rise by 29.1% and 33.2% year-over-year to JPY32.5 and JPY19.6 billion respectively. Dividends were raised by JPY1 to JPY13.00 per share, for a dividend payout ratio of 15.3%.
Total assets rose by JPY20.3 from the end of the previous term to JPY370.8 billion at the end of the term just ended on the back of increases in accounts receivables and inventories accompanying the increase in sales. Total liabilities rose by a lesser margin of JPY1.0 to JPY189.4 billion, and net assets rose by JPY19.3 to JPY181.4 billion.
Sales growth is expected to slow to 4.6% year-over-year to with sales rising to JPY310.0 billion due to weaker demand for small to medium sized optical film product applications that appeared since the start of the fourth quarter of the term just ended. Operating income is expected to decline by 16.4% year-over-year to JPY25.0 billion due in part to anticipation of increases in depreciation and materials prices.
The Bridge Report calls attention to the start of Zeon’s new “Midterm Management Plan SZ-20 Phase II” that covers the period from fiscal year March 2015 to 2017 and calls for the Company to develop responses to the issues of “globalization and growth of emerging markets,” “information technology trends and the spread of the information society,” and “sustainability of the environment and energy resources.” This new plan also maintains a sales target of JPY500.0 billion to be achieved by 2020 through the fortification of global responses in its elastomer materials business for growth markets, and the acceleration of research and development activities in the specialty materials business.
To view the full report, please go to the website at the URL listed
About Bridge Report:
Bridge Report is produced by Investment Bridge Co., Ltd. and provides accurate and objective information about the earnings, business strategies, and other information of publicly traded Japanese companies. Investment Bridge was founded in August 2000 and is one of Japan’s leading independent IR support services companies. Investment Bridge specializes in providing various solutions to Japan’s publicly traded companies with the goal of expanding our clients’ shareholder base and liquidity through increased recognition and understanding of companies.