Investment Bridge Announces Investment Opinion: Bridge Report on ZEON CORPORATION: The Results for the Fiscal Year March 2017 and the Estimates for the Fiscal Year March 2018

Investment Bridge, one of Japan’s leading independent investor relations services companies, has released a "Bridge Report” on ZEON CORPORATION (TOKYO First section: 4205) reviewing its earnings results for the fiscal year March 2017 and estimates for the fiscal year March 2017.

Report Highlights

• Sales declined by ¥8.0 billion year-on-year to ¥287.6 billion during fiscal year March 2017. While increases in sales of optical film for television applications and battery materials contributed an additional ¥8.0 billion in sales, deterioration in overseas market pricing and in pricing of elastomer products, and foreign exchange led to sales losses of ¥6.6 and ¥9.4 billion respectively. Operating income rose by ¥0.9 to ¥30.8 billion. Pricing declines and foreign exchange depressed profits by ¥6.6 and ¥9.4 billion respectively, but lower raw material costs and economies of scale boosted profits by ¥10.6 and ¥5.1 billion respectively. Ordinary income declined by ¥0.3 to ¥31.8 billion. Foreign exchange related loss expanded to ¥0.9 billion. Net income rose by ¥5.1 to ¥23.2 billion due in part to a reduction in losses from liquidation of affiliated companies to ¥0.5 billion in the current term from ¥3.6 billion in the previous term.
• Zeon’s fiscal year March 2018 earnings estimates call for sales to rise by 0.8% year-on-year to ¥290.0 billion. The elastomer and specialty materials businesses are both expected to trend strongly, but operating income is expected to decline by 5.7% year-on-year to ¥29.0 billion. Strong trends in battery materials and optical films are expected to boost profits of the specialty materials business, but pricing declines are expected to lead to a decline in elastomer material business profits. Ordinary and net incomes are expected to decline by ¥1.8 and ¥3.2 billion to ¥30.0 and ¥20.0 billion respectively. Dividend is expected to be raised by ¥1 from the previous term to ¥17.00 per share for an anticipated dividend payout ratio of 18.9%.
• While sales of the specialty materials business rose during the previous Medium Term Business Plan, pricing declines contributed to a 3% decline in sales of elastomer material business from fiscal year March 2014 to ¥307.5, ¥295.6 and ¥287.6 billion in fiscal years March 2015, 2016 and 2017 respectively. This has been identified as one of the most important issue to be tackled in the New Medium Term Business Plan entitled "SZ-20 Phase III”. Therefore, growth in S-SBR sales will be a key in realizing the expansion of the elastomer material business. Another important factor to keep close watch on is how effectively synergies can be derived through collaboration with Sumitomo Chemicals Co., Ltd.

To view the full report, please go to the website at the URL listed below.
http://www.bridge-salon.jp/report_bridge/archives/eng/4205/20170926.html

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.

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