Tokai Carbon : Notice on Special Loss and Revision of the Earnings Forecast
January 31, 2017 at 12:05 am
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News Release 2017
January 26, 2017
Notice on Special Loss and Revision of the Earnings Forecast
Tokai Carbon announces a special loss for the fiscal year ended December 31, 2016 (from January 1 to December 31, 2016) as follows.
Further, we have revised our forecast of the consolidated earnings for the full year which was an- nounced on November 2, 2016.
Special loss items
Impairment loss for electrode manufacturing facilities (approximately ¥4 billion)
Market prices for graphite electrode products have fallen steeply and the profitability of the graph- ite electrodes business has significantly decreased due to the ongoing worldwide imbalance between supply and demand for these products. In view of current market trends, the company has revised its forecast for future earnings and anticipates recording an impairment loss of approximately ¥4 billion for electrode manufacturing facilities owned by the company.
Special severance payment (¥286 million)
The company will record a special loss of ¥286 million because it has confirmed that special sever- ance payments will be made to voluntary retirees in the "Structural Reform of the Fine Carbon Seg- ment and Introduction of the Early Retirement Program" that was announced on May 30, 2016.
Revisions in Earnings Forecast
Revision of the consolidated earnings forecast for the full year ended December 31, 2016 (from Jan- uary 1 to December 31, 2016)
Net sales
Operating income
Ordinary income
Net income/(loss) attributable to the owners of the parent company
Net income per share (EPS)
Previous forecast (A)
JPY in millions
JPY in millions
JPY in millions
JPY in millions
JPY
87,000
700
1,000
(5,100)
－
Revised forecast (B)
88,500
1,000
1,700
(8,300)
－
Difference (B - A)
1,500
300
700
(3,200)
－
Difference rate (%)
1.7
42.9
70.0
－
－
(Reference)
Results from previous fiscal year, ended December 31, 2015
104,864
4,088
4,317
2,484
11.65
Reason for revisions
Net sales are anticipated to exceed the previous forecast due to graphite electrodes and fine carbon sales volumes that exceeded the forecast, as well as a lower yen exchange rate and other factors. Oper- ating income is expected to exceed the previous forecast due to progress in improving selling prices in the Carbon Black business. Ordinary income is expected to exceed the previous forecast due to the op- erating income improvement factors as well as a ¥537 million decrease relative to the forecast for for- eign exchange losses booked as non-operating expenses associated with the decrease in the value of the yen at the end of the fiscal year. Moreover, net income attributable to the owners of the parent compa- ny was lower than the previous forecast due to the impairment loss of approximately ¥4 billion and the special severance payments of ¥286 million mentioned in "1. Special loss items".
* The above-mentioned earnings forecasts are based on the information currently available to the Company and certain assumptions judged to be reasonable. Note that actual performance may significantly differ due to a variety of factors.
End of notice
Date of release: January 26, 2017 Company name: Tokai Carbon Co., Ltd.
Security code: 5301 [Tokyo Stock Exchange]
Contact: Kazuhiko Matsubara, Executive Officer and General Manager, Accounting Department, Tel.: +81-3-3746-5100
Tokai Carbon Co. Ltd. published this content on 31 January 2017 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 31 January 2017 05:04:03 UTC.
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Tokai Carbon Co., Ltd. is one of the Japanese leaders in manufacturing and marketing of coal and graphite products. The group is also producing industrial furnaces. Net sales break down by family of products as follows:
- coal and graphite products (69.6%): coal, graphite electrodes, special graphite and friction materials primarily for industrial, electronic, energy, automotive and mechanic applications;
- cathodes for smelting aluminum and furnace linings (18.1%);
- industrial furnaces and heating products (6.9%): for thermal processing of ceramic products, electronic components, metals, glasses, etc.;
- other (5.4%).
Net sales break down geographically as follows: Japan (24.6%), Asia (26.7%), the United States (26.5%), Europe (11.6%) and other (10.6%).
TOKAI CARBON CO., LTD. 
