Nippon Sheet Glass: oil prices hit operating profit

Nippon Sheet Glass Company“s group operating profit for fiscal 2005 fell 29.9% from the previous year to JPY 8.429 billion because of a rise in fuel costs reflecting higher crude oil prices, the firm…

Nippon Sheet Glass Company“s group operating profit for fiscal 2005 fell 29.9% from the previous year to JPY 8.429 billion because of a rise in fuel costs reflecting higher crude oil prices, the firm said on 31 May 2006. Recurring profit for the year that ended in March 2006 also fell 21.4% to JPY 10.425 billion. Higher fuel costs took a JPY 3 billion bite out of operating profit, according to company officials. Meanwhile, the company“s fiscal 2005 group sales increased 0.3% to JPY 265 billion on the back of steady sales of automotive glass and flat glass for construction use outside Japan. Net profit rose 2.3% to JPY 7.764 billion as special profit increased about JPY 1.2 billion from the previous year to JPY 6.6 billion thanks to a greater securities sales profit. On the other hand, its special loss decreased JPY 1.7 billion to JPY 5.5 billion. Nippon Sheet Glass did not give earnings estimates for the current year ending in March 2007, as information disclosure is restricted under British regulatory rules until the 16 June 2006 completion of its acquisition of UK glass major Pilkington PLC. Nippon Sheet Glass is considering releasing its fiscal 2006 earnings estimates around 6 July 2006, company officials said. In the current year, the company is performing well in its glass fiber and electronic parts businesses, Senior Managing Director Masakuni Nitta said. However, its automotive glass business is struggling because of the higher fuel costs, he said. The balance of the firm“s interest-bearing debts at the end of fiscal 2005 nearly doubled from the previous-year level to JPY 236.9 billion as it took in new loans from banks and issued convertible bonds for the acquisition of Pilkington. But Hiroyoshi Koshiba, an executive officer, said that the balance of loans increased only JPY 45 billion and that this poses no problem for the company in light of its cash flow generation. Nippon Sheet Glass plans to improve its balance sheet in two to three years using cash flow at Pilkington, he said.