On May 13, Nippon Paint announced its consolidated business results for the fiscal year ended March 31, 2008. The following is a summary of those results.
During the period under review, the shipments of paints and coatings in Japan remained at nearly the same level as the previous year in terms of quantity, but marked an increase in terms of value. However, the prolonged rise in raw material costs due to escalating prices for crude oil and naphtha has had a significant impact on earnings. Faced with these difficult conditions, the Nippon Paint Group implemented various measures, including repeated revision of sales prices, sales promotion for environment-friendly products and continued efforts at cutting manufacturing costs. As a result, the Nippon Paint Group posted a 33.4 billion yen (14.8%) increase in consolidated net sales to 259.3 billion yen. This increase was divided into a 32.9 billion yen increase for paints and coatings, and a 500 million yen increase for fine chemicals. Within the paints and coatings business, the automotive coatings segment recorded sales of 96.5 billion yen, or an increase of 38.3% compared to the previous fiscal year, while sales in the industrial coatings segment amounted to 43.1 billion yen, or an increase of 1.5%. Sales in the trade-use paints segment grew 12.3% to 44 billion yen.
As for profits, the aforementioned soaring raw material prices drove the cost of sales ratio up by 0.9 points, which kept an increase in gross profits at 8.4 billion yen. The addition of a new consolidated subsidiary along with expanded business at Asian subsidiaries resulted in a 9.1 billion yen increase in selling, general and administrative (SG&A) expenses. Consequently, consolidated operating income decreased 750 million yen from the previous year to 9.9 billion yen. Despite the increased equity method income thanks to solid business expansion in China, losses on elimination/consolidation of equity-method affiliates in Europe along with the posting of foreign exchange losses caused consolidated income before income taxes to decline 1 billion yen to 11.3 billion yen. Consolidated net income totaled 6.7 billion yen, a decrease of 800 million yen compared to the previous year.
The present fiscal year is the third year of our long-term management plan targeting 2010. As we strive to develop Nippon Paint into a corporate group that maintains a global-scale business in paints and coatings with world-class technology, we have concentrated on solidifying and strengthening Nippon Paint’s corporate foundation over the past two years. With our efforts in this area almost complete, we will draw on the collective capabilities of the Nippon Paint Group to maximize our competitive strength in the marketplace during the present fiscal year.
Along with our slogan “visionary ideas and unsurpassed craftsmanship,” we have established a new watchword, “Hit the market, Fight for the SOM”, for fiscal 2008. With fresh determination and unity, we will strive wholeheartedly to achieve our long-term goals. Please join us in looking ahead to the successful development of the Nippon Paint Group.
