TOKYO — Amid "deteriorating China and elastomer markets," Zean has downgraded its financial statements for the fiscal year ending March 31, 2024**.
The Japan-based group currently expects sales of around 25$800 million, down from $26 in July$700 million.
In its Oct. 27 financial update, Zeon added that operating income is expected to reach 1$700 million, down from $2$1.3 billion.
"The main products of the Materials and Performance Materials business units are being impacted by the delayed recovery in demand," the company said. ”。As a result, overall sales are expected to be lower than expected when earnings were initially announced**.
In the second quarter of this year, sales in the Zeon Elastomers business unit fell 9% year-on-year to 3$5.6 billion.
The division's operating profit fell sharply 77% to $8.1 million, down from 4$0.3 billion (based on the average exchange rate for 2022). Zeon linked the decline in sales to a "delayed recovery in chemical demand" as synthetic rubber production was largely flat.
The group noted that sales volume increased sequentially, driven by increased demand for general-purpose rubber.
The decrease in operating income was due to an increase in SG&A (selling, general and administrative expenses) for synthetic rubber and "financial market efficiency" for chemicals.
Zeon noted a negative impact of $1.35 million from lower sales of chemicals and latex and $4.0 million from "scheduled maintenance" at overseas subsidiaries.
Lower sales** also had a negative impact of $12.2 million on revenue, partially offset by a positive currency impact of $6.8 million and a positive raw materials impact of $2.0 million.