Hanwa Co., Ltd. · TSE:8078
Hanwa — H1 FY2015 Earnings Presentation
29 slides from Hanwa's earnings presentation, Nov 24, 2015
Slide 1: Interim Results for the Year Ending March 2016
INTERIM RESULTS for the Year Ending March 2016 November 24, 2015 HANWA CO., LTD. Copyright 2015 Hanwa Co., Ltd. All Rights Reserved 1
Slide 2: Overview of Interim Results
Overview of Interim Results • As for the interim result for this fiscal year, net sales has reached to 788.2 billion yen, decreased by 8.5%, due to the decline in petroleum and steel product prices. • On profit side, operating income have decreased by 9.4%, due to decrease profit in food businesses.
Slide 3: Operating Results (consolidated)
Operating Results ( consolidated ) （Millions of yen） Rate of ・Net sales have decreased by 2015/9 2014/9 changes 8.5% for the same period of the previous year, due to due to Net sales 788,216 861,116 -8.5% revenue decline in petroleum & Gross profit 27,431 27,369 +0.2% chemicals and steel businesses.
Slide 4: Changes in Business Results (consolidated)
Changes in Business results （ consolidated ） Net sales （billions of yen） The U.S. economy was, although not 2,000.0 Year ended Interim period 1,682.5 1,737.3 strong, generally healthy and the 1,650.0 direction of the European economy was 1,511.3 1,500.0 （forecast） unclear. Economic growth slowed in
Slide 5: Financial Position (consolidated)
Financial Position ( consolidated ) （Millions of yen） Rate of ・Total assets have decreased by 2.9% 2015/9 2015/3 from the end of the previous year, change due to decrease of trade receivables and inventories correlated with Total assets 632,783 651,456 -2.9% decrease of sales. Current assets 484,573
Slide 6: Cash Flows Situation (consolidated)
Cash Flows Situation ( consolidated ) ・Net cash provided by （Millions of yen） operation was 29.3 billion yen due to 2015/9 2014/9 change collection of working capital progressed with decrease in net sales. Cash flows from 29,313 (24,679) +53,992 Operating activities ・Net cash used in investment was
Slide 7: Segment Information (consolidated)
Segment Information ( consolidated ) Net sales Segment income （Millions of yen） Rate of Rate of 2015/9 2014/9 2015/9 2014/9 change change Steel 406,318 423,679 -4.1% Steel 6,348 6,810 -6.8% Metal & alloys 73,966 65,447 +13.0% Metal & alloys 1,303 (27) －% Non-ferrous Non-ferrous metals 45,264 41,584
Slide 8: Steel Business Segment
Steel Business Segment （Millions of yen） Net sales Segment income Profit ratio 2015/9 406,318 6348 1.6% 2014/9 423,679 6,810 1.6% Domestic steel demand for building construction and civil engineering is not growing due to delays in many projects caused mainly by shortage of construction workers. Als
Slide 9: Transaction volume in Steel Segment (unconsolidated)
Transaction volume in Steel Segment (unconsolidated) Sales volume of long product remained at the same level because of slow progress of construction. Sales volumes of flat product fell because of declines in factory utilization rates and exports in the manufacturing sector and sluggish demand for f
Slide 10: Market Trend of Long Products
Market Trend of Long Products Long product demand for building construction did not increase because of delays in projects caused by the labor shortage. Slow movement of steel products and lower prices of raw materials caused steel prices to slowly decline. The determination of steelmakers to hold p
Slide 11: Market Trend of Flat Products
Market Trend of Flat Products Demand for flat products was soft as factory utilization rates in Japan decreased along with declining demand in Japan and sluggish exports caused by the lack of overseas economic growth. Market inventories increased and prices showed bearish tendencies. 【Transition of
Slide 12: Market Trend of Steel Raw Materials
Market Trend of Steel Raw Materials Despite lack of sufficient steel demand in China, major mining companies with build-up capacities continued their cheap offers of foreign iron ore. The price is currently below $50/ton and is still declining. 【Iron Ore Market in China】 160 120 80 Iron ore spot pri
Slide 13: Metallurgical coal price and contract prices
Coking coal demand has also 【Metallurgical coal price】 130 declined along with iron ore demand. Metallurgical coal(US$：/FOB Australia) Competition with Chinese domestic coking coal is causing the price to fall even faster. 100 Contract prices between mining companies and Japanese steel mills decline
Slide 14: Markets Trend of Steel Scrap
Markets Trend of Steel Scrap Market price of steel scrap declined under the pressure from cheap exports of Chinese billet made from continuously falling steel raw materials. Japanese rebar mills retained a bullish position based on expectations for higher construction demand in the future, but there
Slide 15: Steel Market Trend in China
Steel Market Trend in China There is still no progress with reducing steel output as crude steel production remained high even as steel demand has been lackluster. Market prices were down sharply because of weak demand, thus exports are tend to be expanding. 【Transition of steel market in China 】 80
Slide 16: Metals & Alloys Business Segment
Metals & Alloys Business Segment （Millions of yen） Net sales Segment income Profit ratio 2015/9 73,966 1,303 1.8% 2014/9 65,447 (27) -0.0% Halting production of nickel pig iron in China caused by Indonesia embargo on nickel ore created high demand for nickel ingots. Sales of nickel compounds for bat
Slide 17: Market Trend of Metals & Alloys
Market Trend of Metals & Alloys Prices of all raw materials continued to decline. One reason was weak demand for stainless steel raw materials because of soft demand for stainless steel. The other reason was bearish trend of global commodities, including crude oil. 2,500 140 (Ni, FeSi, MeSi, Stainle
Slide 18: Non-ferrous Metals Business Segment
Non-ferrous Metals Business Segment （Millions of yen） Net sales Segment income Profit ratio 2015/9 45,264 515 1.1% 2014/9 41,584 175 0.4% Sales expansion reflected the first contribution of newly consolidated subsidiary Seiki Metal and growth of volume in copper, lead and precious metal scrap. The s
Slide 19: Markets Trend of Non-ferrous Metals
Markets Trend of Non-ferrous Metals LME prices continued to move down because of concerns about slowing economic growth in China. Rising copper inventories and the devaluation of the Chinese yuan also contributed to the decline in prices. 2,400 7,500 7,000 2,200 6,500 Al,An,Pb(US$/t) 2,000 Cu(US$/t)
Slide 20: Foods Business Segment
Foods Business Segment （Millions of yen） Net sales Segment income Profit ratio 2015/9 47,705 (164) -0.3% 2014/9 43,920 593 1.4% Demand in Japan was weak and prices in the key fish species were lower than previous year. Newly consolidated subsidiary Seattle Shrimp Seafood contributed to sales growth
Slide 21: Market Trend of Frozen Marine Products
Market Trend of Frozen Marine Products Although demand is sluggish, prices in Japan are currently level off because of the yen’s weakness. Offer price of salmon from the packers was weak because of the large catch of wild salmon. The price of shrimp decreased because of declining demand in Japan and
Slide 22: Petroleum & Chemicals Business Segment
Petroleum & Chemicals Business Segment （Millions of yen） Net sales Segment income Profit ratio 2015/9 150,042 1,006 0.7% 2014/9 231,193 1,204 0.5% Sales and earnings decreased as prices of refined products fell along with the cost of crude oil. Also, bunker fuel demand declined because of the weak m
Slide 23: Market Trend of Crude Oil & Petroleum Products
Market Trend of Crude Oil & Petroleum Products Although the price of crude oil initially recovered somewhat from last year’s big drop, the price is falling again due to slow economic growth in China, piling up U.S. inventories and investors’ attitudes staying away from commodity markets. 160 （Crude
Slide 24: Other Segment
Other Segment （Millions of yen） Net sales Segment income Profit ratio 2015/9 129,230 518 0.4% 2014/9 115,930 355 0.3% The weaker yen increased yen conversions of sales in foreign currencies at overseas sales subsidiaries. An improvement in earnings in the lumber business, which had difficulties in t
Slide 25: Progress of QSP Business Strategy in Western Japan
Progress of QSP Business Strategy in Western Japan Continuing to implement the SOKOKA (quick delivery, small volumes, processing services) strategy by targeting regional and small-scale demand. In the fiscal year’s first half, we acquired two Osaka-based companies: Daisun, a large steel wholesaler,
Slide 26: Progress of QSP Business Strategy in Eastern Japan
Progress of QSP Business Strategy in Eastern Japan In the eastern Japan, fewer steel wholesale Hokkaido Branch Office (Sapporo City) business acquisition opportunities than in the western Japan; opened sales offices in all regions, increased cooperation with regional Tomakomai Logistics Center (Toma
Slide 27: Business Forecast FY2015 (year ending March 31, 2016)
Business Forecast FY2015 ( year ending March 31, 2016) In the first half, transaction earnings were less than expected and there were losses from equity-method affiliates. First half sales and earnings were low relative to the fiscal year forecast and there are no prospects for the initially expecte
Slide 28: Forecast of Segment Information
Forecast of Segment Information Net sales Segment income （Millions of yen） Rate of Rate of FY2015 FY2014 FY2015 FY2014 change change Steel 825,000 878,715 -6.1% Steel 13,900 14,735 -5.7% Metal & alloys 145,000 131,171 +10.5% Metal & alloys 2,400 343 +599.7% Non-ferrous Non-ferrous metals 90,000 83,3
Slide 29: A Cautionary Note on Forward-looking Statement
A Cautionary Note on Forward-looking Statement This material contains statements (including figures) regarding Hanwa Co.,Ltd.(“Hanwa”)’s corporate strategies, objectives, and views of future developments that are forward-looking in nature and are not simply reiterations of historical facts. These st