Taiyo Nippon Sanso (TNSC)’s sales revenues increased by 14.6% with its core operating income up 9.6%, operating income up 11.7% and net income 13.9% comparing with the previous term.

The net income of the previous term appeared as negative last year, but it was attributed to some special reasons that the company posted acquisition-related accounts like advisory cost amounting to JPY2.7 billion in connection with the European business of Praxair which was acquired in December 2018. Furthermore, there was another special factor that the company’s corporate income tax reduced by JPY12.2 billion due to the reversal of the deferred tax liability in the US affiliate following the US tax revision last year.

In case of disregarding the situation in the USA, the current income for the term would have amounted to about JPY53.5 billion with an increase of JPY4.5 billion from the previous term. As for the industrial gas business, the segment revenue increased by 5.5%, and the segment operating income decreased by 5.0%.

The sales revenue of JFE Sanso Center Kurashiki Plant was added. This fiscal term was also blessed with abundant factors of incremental sales which include the good metal processing business like the laser cutting machine by subsidiaries including Nissan Tanaka and also the medical field contribution to the sales in the latter half part by IMI which was acquired in October 2018.

On the other hand, deliveries to the field of LCD panels for smartphones decreased although the electronics gas business for the semiconductor requirements grew at a good pace. Affected by the hiking electricity fare and increased production and logistic cost caused by the lack of CO2 sources, the fiscal account was closed with negative results in profit.

TNSC’s gas business in the US grew at a good pace with the sales revenue up 8.5% and the segment profit up 15.3%. In addition to the good results of bulk, onsite and hard goods business as a whole, the revenue for one month in the HyCO business of Linde AG (US$91 million of sales revenue FY2017 ending December) contributed to the increase.

The account of the European gas business which was posted from the third quarter of the term shows the result for the period from December 2018 to March 2019. The sales revenue amounted to about JPY55.1 billion and the segment income to JPY6.5 billion. The sales revenue consists of JPY50.8 billion from industrial gases and JPY4.2 billion from electronics gas. The largest portion of the industrial gas of JPY50.8 billion was bulk gases which amounted to JPY26.5 billion.

As for the gas business in Asia and Oceania, the sales revenue increased by 2.9% and the segment income decreased by 0.9%, showing a flat transition. In terms of sales revenue, the bulk gas business showed a good result in China, Vietnam and the Philippines. The LPG and the related business also showed a good result in Australia. The electronics gas business also grew well in East Asia.

Regarding a little negative case in terms of profit, on the other hand, we notice particularly Leeden NOX’s liquefaction of natural gas for power generation consigned by the Indonesia Electric Company and its transportation business to supply gas to remote islands. An asset for the business an amount of JPY1.3 billion was posted for curtailment of the output process. TNSC explained the reason that the commission fee on consignment reduced due to the market price reduction of natural gas.

As for the Thermos business, the sales revenue increased by 9.6% and the segmental profit increased by 18.6% enjoying a good pace at home and abroad in terms of delivery. In the domestic market newly launched frying pans contributed to the increase in sales amount.

Regarding the forecast of FY2020 ending March, as of the second quarter, the sales revenue is estimated to be JPY435 billion up 32.0% with the core operating income up 63.4% amounting to JPY46 billion, operating income up 58.8% amounting to JPY46 billion and the current profit for the 4th quarter term up 42.6% amounting to JPY26.7 billion comparing with previous term respectively.

In terms of the forecast throughout the year, sales revenue amounts to JPY 8,900 billion with the core operating income up 44.3% amounting to JPY95 billion, operating income up 52.6% amounting to JPY102 billion and the current profit for the term up 36.1% amounting to JPY59.5 billion comparing with previous term respectively. Especially, the consolidation throughout the year of the European gas business is a great factor to forecast an increase in revenue and profit.