Zeon elastomer earnings rise on rubber demand, lower raw material costs

Tokyo — Zeon Corp. has reported higher operating income in its elastomer business for fiscal year 2025 (ended 31 March), supported by synthetic rubber sales, favourable product mix and lower raw material and freight costs.

The division, which includes synthetic rubbers, latexes and chemicals, posted operating income of Yen11.7 billion (€63 million) for the year ended 31 March, up 7% year-on-year, and 30% higher than earlier forecast.

Meanwhile, sales declined 5.4% to Yen223.7 billion but came in 2% above Zeon’s forecast of Yen219 billion, Zeon reported 13 May.

Operating income in the elastomer segment benefited from lower raw material prices, which improved cost of goods sold by Yen9 billion year-on-year, as well as a Yen1.9 billion reduction in ocean freight costs.

The company also cited positive effects from sales mix improvements in synthetic rubbers and currency-related gains from yen depreciation.

These factors offset a Yen10.6 billion negative impact from lower selling prices reflecting softer raw material markets.

Fourth quarter earnings up

Quarterly operating income in the fourth quarter rose 13% year-on-year to Yen2.2 billion, despite a 4% decline in quarterly sales to Yen55.7 billion.

Overall, fourth-quarter volumes dropped 8% year-on-year, reflecting declines across all three segments.

Synthetic rubber volumes fell 7%, while synthetic latexes saw a 25% decline in volumes and chemicals were 1% below the prior-year level.

Within the business, synthetic rubber sales were broadly stable year-on-year at Yen42.7 billion during the fourth quarter, as stronger demand for speciality rubbers and yen depreciation offset lower selling prices linked to declining raw material costs.

In synthetic latexes, quarterly sales fell 20% year-on-year to ¥2.5 billion.

The decline followed the suspension of Zeon’s Tokuyama NBR latex facilities at the end of March, ahead of schedule.

However, Zeon noted that the move contributed to a reduction of Yen500 million in fixed costs.

Chemicals sales also declined, down 12% year-on-year to Yen9.3 billion during the quarter, amid weaker demand for adhesive tapes and labels.

Despite lower sales, operating income in the chemicals segment improved due to lower raw material prices, Zeon said.