Investor Relations

Message from the President

About the Business Summary for the 94th Term

Greetings to all our valued investors. We would like to give you our sincerest thanks for your cotinued patronage. We present our business summary for the 94th term to you here.

Koji Akamizu
President and Representative Director

Photo: Koji Akamizu President and Representative Director

Progress and Achievements of Our Operations

The Japanese economy during the fiscal year was on a moderate recovery path with the effects of various government policies amid continued improvement in the employment and income environment.However, the future is extremely uncertain due to the impact on personal consumption caused by the increase in the consumption tax rate, the slowdown of the global economy caused by the U.S.-China trade problem and the worldwide spread of new corona viruses.

Regarding the performance of the group, our consolidated net sales for the fiscal year decreased by 2.7% from the previous fiscal year to 38.467 billion yen. In addition, sales for each quarter were 10.627 billion yen for the first quarter, 9.661 billion yen for the second quarter, 9.615 billion yen for the third quarter, and 8.562 billion yen for the fourth quarter, which tended to decline over the course of the quarter.

In the first quarter of the fiscal year, all business segments began to exceed the previous year's level. In the second quarter of the fiscal year, however, environmental and performance materials turned to negative year-on-year. Since the third quarter of the fiscal year, electronic materials and hygienic and industrial materials also fell below the previous year's level. We believe that the main factors behind the downward trend in business performance during the period were the prolonged trade friction problem in electronic materials and environmental and performance materials, which had remained strong. Since the second half of the previous fiscal year, leading to a sense of inventory surplus in the market, as well as the forecast of a slowdown in the Chinese economy in particular, which caused consumers to hold back on their purchases.

In terms of profits, operating income for the fiscal year under review declined 2.5% from the previous fiscal year to 648 million yen. Despite the decline in profits, a slight decrease in the extent of the decline in operating income as a percentage of the decline in net sales was attributable to an increase in the gross profit margin due to a shift in the sales mix of products handled to a relatively highly profitable sales mix, although temporarily, and a slight decrease in selling, general and administrative expenses as a result of cost-cutting and other activities. Ordinary income for the fiscal year under review declined 8.2% from the previous fiscal year to 607 million yen. This was primarily due to a decrease in operating income and a deterioration in non-operating income and expenses compared with the previous fiscal year due to foreign exchange losses incurred as a result of the year-end exchange rate shifting to the yen's appreciation. Profit attributable to owners of parent for the fiscal year under review increased by 0.9% from the previous fiscal year to 395 million yen due to the application of tax effect accounting and other factors.

The breakdown of our major businesses is as follows.

Electronic Materials

In the electronic materials business, sales decreased 2.5% year on year to 9.757 billion yen due to prolonged stagnation in the semiconductor industry and a slowdown in demand for materials such as dielectric, despite steady sales of materials for communication equipment and electronic equipment.

Environmental and Performance Materials

In the environmental and performance materials segment, sales decreased 3.7% year on year to 19.472 billion yen due to a decrease in sales of titanium oxide, catalysts for China, and resin products for export throughout the fiscal year under review, despite significant growth in sales of barium intermediates to Japan until the middle of the fiscal year under review.

Hygienic and Industrial Materials

In the hygienic and industrial materials business, sales of hygienic components for the domestic market were firm, but sales of industrial materials such as weather-resistant soil bags were sluggish. As a result, consolidated net sales for the fiscal year under review decreased 0.5% from the previous fiscal year to 9.237 billion yen.

The business performances for each segment are as follows.

Domestic Corporation

In the fiscal year under review, imported products such as barium intermediates and hygiene materials were firm, but sales of titanium oxide and dielectric materials were sluggish. As a result, sales decreased 0.4% to 34.799 billion yen. However, operating income increased 19.5% to 448 million yen due to the improvement in the gross profit margin and a decrease in operating expenses.

International Subsidiaries

In the fiscal year under review, sales decreased 20.1% to 3.667 billion yen, mainly due to lower sales of catalysts for China and plastic products for Europe and Australia, despite favorable sales of businesses in North America. Operating income also declined 32.2% to 184 million yen, mainly due to sluggish growth in gross profit accompanying the decline in net sales.

Issues to Be Handled

Our group has the following action plans to realize the vision of our management plan.

  1. We will focus on new overseas markets and undeveloped fields in order to improve our trade ratio as we work to further expand and deepen our overseas operations.
  2. We will further expand our foreign offices beyond the 8 locations we currently have over a 5 year period, as well as increase our number of personnel (including foreign subsidiary staff) by around 30.
  3. We will treat staff diversity in terms of nationality, gender and age as a source of competitive strength as we work to improve our corporate performance.
  4. We will review our organization and policies in order to encourage ambition and develop our strengths, while promoting human resources that match with the appropriate roles on a global basis.
  5. We will take action to improve our working environment with the aim of being a corporate group that is filled with appeal and energy, while working to raise the motivation of our employees.
  6. We will create value within the chemical product industry that is unique to Sakai Trading, while broadly contributing to society by responding to the needs of our stakeholders.
  7. We aim to improve the quality of our operations through strengthening our corporate governance and internal control system.
  8. We will construct a strong business foundation that can withstand changes to the management environment as we aim towards sustainable growth and raising our corporate value.

To all our valued shareholders, we are grateful and look forward to your continued support and guidance.

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