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| April 4, 2000 |
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| Revised Projection on Non-consolidated and Consolidated
Income |
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| Mitsubishi Chemical Corporation |
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This is to inform that we have revised the Non-consolidated income projection
announced on October 29, 1999 as below #1 as well as the Consolidated income projection
announced on November 24, 1999 as below #2;
| 1. |
Revised Non-consolidated income projection for the year ended
March 2000
(from April 1, 1999 to March 31, 2000)
(  in millions
/ %)
| |
Net Sales |
Recurring Profit |
Net Income/(Loss) |
Previous Projection
(announced on Oct. 29, 1999) |
815,000 |
8,000 |
(4,000) |
| Revised |
830,000 |
8,000 |
(47,000) |
| Increase/(decrease) |
15,000 |
0 |
(43,000) |
| % of increase/(decrease) |
1.8 |
0.0 |
--- |
Previous year actual
(Year ending March 1999) |
868,529 |
2,469 |
(9,855) |
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| 2. |
Revised Consolidated income projection for the year ended March
2000
(from April 1, 1999 to March 31, 2000)
(
in millions / %)
| |
Net Sales |
Recurring Profit |
Net Income/(Loss) |
Previous Projection
(announced on Nov. 24, 1999) |
1,600,000 |
30,000 |
6,000 |
| Revised |
1,650,000 |
35,000 |
(26,000) |
| Increase/(decrease) |
50,000 |
5,000 |
(32,000) |
| % of increase/(decrease) |
3.1 |
16.7 |
--- |
Previous year actual
(Year ending March 1999) |
1,531,635 |
(3,646) |
(27,516) |
Reason for forecast amendment
(Non-consolidated income projection)
Increase of sales is mainly due to the sales price increase in the Petrochemical
segment in accordance with raw materials price hike. Operating income forecast
is 22 billion, up by 1
billion from previous forecast, based on upward income of Petrochemical as well
as increased production of Opt-communication semi-conductor laser, etc. Since
Other Expenses will exceed previous forecast, increase of Operating Income will
be offset and Recurring Profit is expected to stay at the same level of previous
8,000 million projection.
As it is planed to record 91
billion losses in the line of Extraordinary Loss/Profit in contrast with the previous
17 billion, Net Loss
is expected to be (47
million). We plan to continue 2
per share dividend because most of Extraordinary Losses will serve for future
years by increasing the profit level.
(List of 91 billion
Extraordinary Loss/Profit of Non-consolidated basis)
- Full amortization of unrecognized prior service cost: 32
billion
Balance of unrecognized prior service cost for qualified pension plan is to be
charged as Extraordinary Loss, though our past practice was amortizing over mainly
7 years. If this loss is interpreted in relation with postemployment and postretirement
benefits accounting which will be implemented from the fiscal year ended April
2000, the amount of 32
billion is equivalent to the balance of unrecognized transition obligation of
employees working with Mitsubishi Chemical (i.e., employees excluding ones on
secondment) after deducting the planed contribution of capital stocks during the
year ending March 2001 to employee pension fund. While there expects no amortization
expense of unrecognized transition obligations for employees excluding ones in
secondment, expenses for postemployment and postretirement benefits for employees
on secondment will be principally absorbed by the companies which those people
are with. We, therefore, see little impact on non-consolidated basis even under
the newly implemented accounting policy from the fiscal year ending March 2001.
- Special severance expenses: 20
billion
We plan to record 20
billion expenses under early retirement plan effective only during the current
fiscal year. The amount is increased from previous 12
billion because the number of people retired under the plan during the year is
increased from previously projected 500 to newly counted 830. We project, in the
subsequent years, the reduction of human resource cost of 11
billion per annum on consolidated basis due to this headcount reduction.
- Valuation losses on investment securities, etc.: 22
billion
We are to record 22
billion valuation losses on investment securities such as Emoto Industries, Nihon
Asahan Aluminum and so on as well as on loans to subsidiary (Kitakyushu Prince
Hotel). We have applied the method defined under the newly implemented accounting
over financial products effective from the year ending March 2001. 15
billion out of 22 billion
has already been recorded in consolidated financials, and therefore is eliminated
from there for the current year ended March 2000.
- Others: 17 billion
We plan to discontinue the hard disk operation in Mizushima, Japan and to integrate
the hard disk operation only into Singapore, recording 7
billion loss for write-down of plant, property and equipment and such. We are
also recording 9 billion
losses for disposals of affiliates and tangible fixed assets. Write-down of marketable
securities will be 3.4
billion. On the other hand, Extraordinary Profit will be 2.8
billion including gains on sales of investment securities.
(Consolidated income projection)
Sales increase is mainly due to the expansion of the number of fully consolidated
subsidiaries. Operating Income and Recurring Profit are projected to be 64
billion and 35 billion,
increasing by 8 billion
and 5 billion from previous
forecast respectively.
Operating Income by Segment
(Unit:
in billions)
| |
New projection |
Previous forecast |
Increase/(decrease) |
| Petrochemicals |
27 |
23 |
4 |
| Carbon and Agrichemicals |
10 |
10 |
0 |
| Functional Products |
37 |
33 |
4 |
| ...Information and Electronics |
6 |
5 |
1 |
| ...Pharmaceutical |
4 |
3 |
1 |
| ...Specialty Chemicals |
9 |
9 |
0 |
| Functional Materials |
11 |
10 |
1 |
| ...Service |
7 |
6 |
1 |
| Corporate |
(10) |
(10) |
0 |
| Total |
64 |
56 |
8 |
These revisions are due to capitalization of raw materials cost increase into
inventory in the segment of Petrochemicals as well as due to cost reduction or
sales increase in Functional Products segment. Even though we project those increase
in profit, we plan to record 83
billion losses in the line of Extraordinary Loss/Profit and Net Loss is expected
to be (26 billion).
Main portion of Extraordinary Loss is from non-consolidated basis while remaining
losses are due to special severance expenses and losses on disposals of fixed
assets incurred at consolidated subsidiaries.
(Additional notes)
As to consolidated postemployment and postretirement benefits liabilities;
In relation with postemployment and postretirement benefits accounting which will
be implemented from the fiscal year ending March 2001, the balance of unrecognized
transition obligation is projected to be 135
billion. Deducting currently recording 32
billion extraordinary loss and further deducting the planed 30
billion contribution of capital stocks on hand during the year ending March, 2001
to employee pension fund, the balance of unrecognized transition obligation will
eventually be 73 billion.
Because the amount is reduced from original forecast, we will change the amortization
period from over 7 years to over 5 years. (Some subsidiaries will amortize over
different years.) Consequently, net periodic postretirement benefit cost is projected
to be 32 billion under
the new accounting policy, increasing by 9
billion from current postretirement cost recognition. This 9
billion is in contrast to previously projected 12
reducing by 3 billion.
We plan to record 13
billion amortization expense of unrecognized transition obligation in the line
of Extraordinary Loss. |
| For further information, please contact |
| Public Relations Dept., |
| Mitsubishi Chemical Corporation |
| Tel: [+81] 3-3283-6274 |
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