Tokyo – JSR Corp.’s elastomer unit has posted a first half loss of Yen12.7 billion (€104 million) for the six months to end of September, but expects to see a significant recovery as demand picks up.
The Japanese materials supplier posted a 36% decline in first half sales to Yen58.6 billion, due to “a worldwide slump in the automobile and tire markets” following the outbreak of Covid-19.
The company reported a decrease in sales volume of “almost all of synthetic rubber products” due to operational adjustments in the customer industry.
In addition, the price gap was affected by a shrink of butadiene-naphtha spreads and the "inventory effects", as it discharged of inventory using relatively expensive raw material.
Assessing the impact of the pandemic on the business environment, JSR said Covid-19 roughly contributed to a 30% decline in demand in the first half its financial year. For the second half, however, the supplier expects the impact to slow down to 10%.
JSR also noted a recovery trend in the second quarter, which saw sales volume improve 40% quarter-on-quarter to 128,000 tonnes.
While the demand environment remained severe during the three months to end of September, JSR reported a recovery and “positive growth” in the Chinese automotive-related market during the period.
Other regions such as Japan, Europe and the US bottomed out in the first quarter, and are on a recovery trend, it added.
Although the business environment remains “abnormal,” JSR said it expected “a significant reduction in deficit” in second half of the year, based on an increase in sales and cost reduction plans.