During the fiscal year under review (from January 1, 2016 to December 31, 2016), the global economic environment surrounding the Company and its consolidated subsidiaries remained on a gradual recovery track on the whole.
In Japan, the economy showed a gradual upward trend thanks to factors such as economic measures taken by the government although some sections were lagging behind the recovery trend. The European economy made a gradual recovery and the United States continued its economic recovery along with increased consumer spending and other factors. The economy was picking up in China and other emerging countries. Under such a business environment, the AGC Group posted net sales of 1,282.6 billion yen for the period under review, down 43.7 billion yen or a 3.3% decrease from the previous year, due to such reasons as the strong yen. Operating profit increased by 25.1 billion yen or up 35.3 % year-on year to 96.3 billion yen, owing to positive factors including increased shipments of automotive glass and chemical products, the price hike of architectural glass and the cost decrease mainly from the decline of raw materials and fuel prices. Profit before tax was 67.6 billion yen, down 17.0 billion yen or a 20.1% decrease on a year-on-year basis mainly due to the impact of the income from revision of the defined benefit corporate pension plan posted during the six months ended June 30, 2015. Profit for the year attributable to owners of the parent was 47.4 billion yen, up 4.5 billion yen or a 10.6% increase on a year-on-year basis primarily because of a decrease income tax expenses.
– Glass Shipments of architectural glass remained robust in Europe and North America and stayed at the same level as the same period of the previous year in Japan and other Asian countries. Sales decreased on a year-on-year basis, mainly affected by the strong yen, although selling prices increased mainly in Europe and North America. In the automotive glass business, both shipments and sales increased from the same period of the previous year owing to increased auto production in Europe, China and North America. Consequently, AGC Group’s sales increased on a year-on-year basis. As a result, net sales from the Glass Operations for the fiscal year were 680.0 billion yen, down 12.9 billion yen or a 1.9% decrease from the previous fiscal year. Operating profit was 31.8 billion yen, up 18.8 billion yen or a 143.9% increase mainly due to the strong shipments of automotive glass, the increased selling prices of architectural glass products, and the decline of raw materials and fuel prices.
– Electronics Regarding LCD glass substrates, the selling prices decreased but shipments increased year on year. Shipments of specialty glass for display applications decreased in the field of electric device applications on a year-on-year basis while the shipments of cover glass for car-mounted displays increased. Shipments of glass for solar power systems decreased from the previous year. Regarding electronic materials, shipments of optoelectronics materials decreased on a year-on-year basis despite a recovery in the second half of the year.
As a result, net sales from the Electronics Operations for the fiscal year, were 258.1 billion yen, down 30.4 billion yen or a 10.5% decrease, and operating profit was 25.0 billion yen, down 4.1 billion yen or a 14.0% decrease from the previous fiscal year.
– Chemicals Sales of chlor-alkali products and urethane materials increased year on year as shipments in Southeast Asia were strong and new facilities in Indonesia started operation. In the categories of fluorine products and specialty products, sales decreased year on year mainly because shipments of some products decreased and the Japanese yen remained strong. As a result, net sales from the Chemicals Operations for the fiscal year, were 316.6 billion yen, down 1.9 billion yen or a 0.6% decrease from the previous fiscal year. Operating profit was 40.0 billion yen, up 9.5 billion yen or a 31.0% increase from the previous fiscal year, mainly due to an increase in the sales volume and a decline of raw materials and fuel prices.
Net sales of the AGC Group for the fiscal year ending December 31, 2017 are forecasted to be 1,350.0 billion yen, up 67.4 billion yen or a 5.3% increase from a year earlier, and operating profit is forecasted to be 105.0 billion yen, up 8.7 billion yen or a 9.0% increase year on year. Profit before tax will be 93.0 billion yen, up 25.4 billion yen or a 37.6% increase from the previous fiscal year and profit for the year attributable to owners of the parent is estimated to be 66.0 billion yen, up 18.6 billion yen or a 39.1% increase from the previous fiscal year. Average exchange rates assumed for the fiscal year ending December 31, 2017 are 110 yen to the U.S. dollar and 120 yen to the Euro. Forecast of financial conditions for FY2017 Of the cash flows from operating activities, profit before tax is expected to increase by 25.4 billion yen to 93.0 billion yen as compared with that for the fiscal year ended December 31, 2016. Depreciation expenses are expected to be 130.0 billion yen, up 8.2 billion yen from the previous fiscal year. Of the cash flows from investing activities, capital expenditures are expected to increase 34.0 billion yen year-on-year to 160.0 billion yen. As for financing activities, the AGC Group will repay interest-bearing debts and increase borrowings, in addition to dividend payments in accordance with the Group’s dividend policy.
Full information is available on the company website at http://www.agc.com/english/news/20170207e_1.pdf