NSG Group: decrease in net income for fiscal 1H; outlook for full year cut

Net income at Nippon Sheet Glass (NSG Group) dropped 64% to JPY 18.3 billion (USD 189.1 million) for the first half of fiscal year 2009, ended 30 September 2008.
For the same six-month period in 2007…

Net income at Nippon Sheet Glass (NSG Group) dropped 64% to JPY 18.3 billion (USD 189.1 million) for the first half of fiscal year 2009, ended 30 September 2008. For the same six-month period in 2007, the company recorded net income of JPY 51.5 billion. This decrease reflected a 36% fall in operating income to JPY 17.2 billion, compared with JPY 27 billion recorded the previous year. Sales revenue for the same period lost 1% year-on-year, going from JPY 433.9 billion to JPY 431.1 billion in 1H of fiscal 2009. Sales revenue from the automotive segment, which makes up for 44% of Group sales, saw an increase from JPY 183.2 billion to JPY 187.8 billion, excluding inter-segment sales. However, cost increases and challenging market conditions resulted in a drop in this segment“s operating income to JPY 10.5 billion, compared with JPY 12.6 billion in 1H of fiscal 2008. In Europe, OE and Automotive Glass Replacement (AGR) segments, which represent 52% of the Group“s automotive sales, saw improved revenues, but profits were lower than the previous year“s levels. Japan, which contributes 15% of automotive sales, recorded slightly improved revenues year-on-year, while profits in this region increased, due to improvements in manufacturing and operational performance. OE sales in North America, which make up 20% of the Group“s automotive sales, were lower than those of 1H of fiscal 2008, along with a decrease in profits. This decrease was caused by the costs of a float re-build, the supplier says. North America is also expected to record further declines in sales. Revenue and profits from the rest of the world continued to be relatively strong. However, growth rate for the second half of the fiscal year is expected to decrease. NSG Group has cut its forecast for the full fiscal year (April 2008 – March 2009), under which the company expects an 8% decrease in sales compared with its earlier guidance, down to JPY 810 billion. A 35.5% cut has been announced for its operating income, which now stands at JPY 20 billion, resulting in expected net income of JPY 9 billion, down 67.3% from the JPY 27.5 billion forecast. The company had recorded net income of JPY 50.4 billion for full-fiscal 2008. This revision has partly been caused by the stronger yen, resulting in reduced income on consolidation. Challenging market conditions are also expected to play a part in dampening revenues.