Tokyo - Zeon Corp. is revising down its forecasts for sales and operating profit for its fiscal year ending 31 March in view it said of the current “bleak" economic situation.
Group sales are now expected to come in at Yen320 billion (€2.6 billion), some Yen10 billion lower than estimates announced last April, Zeon said in its nine-month report.
The group has also lowered its forecast for operating profit by Yen5 billion, to Yen25 billion, the statement issued 30 Jan also shows.
The Japanese materials supplier also reported a third consecutive quarter of decline within its elastomers business, which contributes to more than half of its overall sales and a third of total operating profit.
Over the nine months to end of December, net sales for the elastomers segment – comprised of ‘rubbers’, latex and chemicals units – fell 9% year-on-year to Yen135 billion, while operating income decreased 41% at Yen8.5 billion.
Rubber sales and operating income decreased due to 'sluggish business' in the automotive segment and general industry, Zeon reported.
Posting a Yen9.7 billion decline, rubber sales remained weak in all domestic, export and overseas subsidiaries, the company added.
Volume sales for general purpose rubbers, mainly used for tires, rose 6%, marked by the growth of shipments outside of Japan and despite weak demand for tires.
Speciality rubbers, mainly used within the automotive industry, posted a 10% decline in volumes due to global demand decline and sluggish market conditions, Zeon noted.
Sales and operating income in the rubber chemicals unit also fell, mainly as a result of regular plant maintenance.