Recap of Business Results
The sale of all shares of Daiichi Kasei Holdings on March 31, 2015 removed most of the Advanex Group's plastics operations from consolidated accounting for the fiscal year ending March 31, 2016 and subsequent fiscal years. Primarily as a result of this adjustment, revenues and earnings dropped across the board. Net sales in FY2016 1H fell 30.4% YoY to ¥9.924 billion, operating income contracted 27.0% YoY to ¥366 million, ordinary income declined 18.6% to ¥353 million and net income retreated 25.5% to ¥237 million. If plastics operations are excluded from calculations, both revenues and earnings posted gains during the period, as net sales increased 12%, operating income improved 20%, ordinary income nearly doubled with a 92% increase, and net income grew 20%. The Company has reached its public targets for H1, indicating that its business is expanding steadily. To secure long-term growth, Advanex is pivoting to markets where demand is less subject to fluctuation, particularly including the automotive and medical-equipment markets. During the period under review, excluding plastics, net sales to the automotive sector grew 22% YoY, while net sales to the medical-equipment sector leapt 36%. Breaking down results by region, Asia including Japan accounted for less than 40% of net sales, while North America and Europe accounted for over 10% of net sales, indicating a globally balanced sales structure.