Zeon upgrades earnings forecast as elastomer margins improve

Tokyo – Zeon Corp. has raised its earnings forecast for its fiscal year ending 31 March, due in part to improved margins within its elastomers business.

The group now expects earnings (operating profit) of Yen26.5 billion (€166 million), up 13% compared to an earlier forecast in October 2024 – and 30% above the prior-year level.

Zeon also expects total sales to come in 0.5% higher than previously estimated, to reach Yen417 billion, representing a 9.1% year-on-year improvement.

The upward revision was linked to strong demand for large-screen televisions and mobile devices within the group's 'high-performance materials' segment.

Additionally, Zeon said, its 'elastomer materials' segment had benefited from a favourable exchange rate and improved profit margins.

For the three months to end of December 2024, Zeon’s elastomers division posted a 4% year-on-year increase in earnings to Yen2.9 billion, on 29% higher sales of Yen58 billion.

Earnings were up, due mainly to higher sales prices and a lull in ocean freight costs, despite lower volumes and unfavourable exchange rates during the quarter.

The unit, which includes synthetic rubbers, latex and chemicals, saw volumes decline 5% year-over-year, reflecting a 12% drop in synthetic rubbers volumes.

In contrast, volumes for latexes and chemicals grew 21% and 4% year-on-year respectively.

Sales for synthetic rubbers, however, grew 4% to Yen4.4 billion on price adjustments following soaring raw materials costs.

Sequentially, however, sales were down due to shipment adjustments at the Tokuyama and Takaoka plants for regular maintenance, primarily in synthetic rubbers and latices.

Furthermore, sales were impacted  by the 'absorption merger' into Zeon on 1 Oct 2024, after the dissolution of ZS Elastomer Co., a joint venture with Sumitomo Chemical. (ERJ report)