Price adjustments, weaker yen drive Zeon elastomers' earnings growth

Tokyo – Zeon Corp.'s elastomer business saw a significant recovery in fiscal 2024 (ended 31 March), driven by pricing actions and currency effects.

The unit, which supplies synthetic rubber, latex and chemicals, posted a 10% year-on-year increase in sales to Yen362 billion (€1.5 billion).

Operating income for the division rose sharply, up 65% year-on-year to Yen10.9 billion compared to the year before, Zeon reported 25 April.

According to Zeon, the improvement reflected better selling prices, mainly for synthetic rubbers and latexes, and the impact of a weaker yen.

However, the business continued to face headwinds from rising raw material prices, higher shipping costs, and inventory losses in the chemicals segment.

In the final quarter of the fiscal year, elastomer sales totalled Yen58.1 billion, up 4% year-on-year and 1% higher than the previous quarter.

Operating income for the quarter stood at Yen2 billion, more than three times higher than the same period a year earlier but down 33% from the previous quarter.

Fourth quarter volumes fell 9% year-on-year, with synthetic rubbers seeing a 13% year-on-year decline but a 10% recovery quarter-on-quarter.

Volumes for chemicals improved 3% compared to the final quarter of 2023, while latexes saw a 7% decrease year-over-year.

Synthetic rubbers contributed Yen42.7 billion to fourth-quarter revenues, up 4% year-on-year but down 2% quarter-on-quarter.

Zeon said shipments recovered after maintenance work at its domestic plants, although overseas demand remained weak, particularly for general-purpose rubbers.

The synthetic latex business reported fourth-quarter sales of Yen3.2 billion, up 5% year-on-year but 8% lower compared to the previous quarter, reflecting weaker overseas performance.

Quarterly sales in chemicals reached Yen10.5 billion, up 7% year-on-year and 9% quarter-on-quarter, supported by stable demand for adhesives and labels.

However, operating income in the segment was impacted by inventory-related losses.