Japan: Tokai Carbon's Graphite Electrodes Sales plunges by 11% Y-o-Y in 2019

According to the financial results published by Tokai Carbon, while the company's performance in terms of consolidated sales have improved y-o-y basis, its sales from graphite electrodes segment have registered a fall of 10.5% year-on-year basis in 2019.

Tokai Carbon's consolidated net sales (includes Graphite electrodes, Carbon Black and Fine Carbon) have been recorded at 262.03 million yen against 231.3 yen in previous year. Whereas the GE business sales decreased 10.5% y-o-y to 91,317 million yen.

According to the company's management, while the GE sales prices increased in 2019 y-o-y basis amid the global tightening of raw materials supply (needle coke) its purchase volume declined year on year due to high inventories with the customers against the backdrop of tepid global steel demand amid U.S. - China trade war resulting in its sales plunge. The company has also cited deceleration of the European economy from the beginning of the year as one of the key factors for the plunge in its GE sales. European location recorded a valuation loss of approximately 1.2 billion yen due to a decline in profit.

In terms of operating income, Tokai's consolidated operating income have registered a plunge of 25.6% y-o-y basis from 73.07 million yen in 2018 to 54.34 million yen in 2019. The company's operating income from GE segment fell 29.7% year on year to 39,388 million yen.

As for the outlook for 2020, the company expects the world economy to remain on a moderate recovery path. However, given uncertainties such as the developments of U.S.-China trade negotiations, political climate surrounding the U.S. presidential election, reverberations of the U.K.'s withdrawal from the EU, the situation in the Middle East, and spread of the new coronavirus infection, the visibility is getting more unclear. In this operating environment, the group forecasts consolidated financial results for the fiscal year ending December 31, 2020 as follows: Net sales of 251,200 million yen (down 4.1% year on year) and operating income of 28,200 million yen (down 48.1% y-o-y basis).