Nippon Sheet Glass (NSG) recently released its 2020 fiscal year financial results and it noted the company’s automotive glass sales revenue decreased when compared to the same period last year. NSG is one of the largest auto glass manufacturers in the world, offering both original equipment manufacturer (OEM) and aftermarket glass.
The company noted its revenues and profits were affected by foreign exchange movements, challenging trading conditions in core regions, and COVID-19 in its fourth quarter, according to the report. [Its fiscal year is April 1, 2019 – March 31, 2020.]
“Fiscal year 2021 to face a sharp demand decline caused by COVID-19, which is expected to bottom out gradually from May as economic activities restart,” a portion of the report reads.
NSG’s trading profit was less than its results in 2019. The company noted its automotive section was affected by “volume reductions” in Europe, which were worsened by COVID-19’s impact on NSG’s fourth quarter.
“The [company] experienced increasingly difficult trading conditions in its core markets during the year with underlying market conditions deteriorating from the third quarter. COVID-19 impacted the technical glass business from January 2020 and severely impacted the automotive businesses from March 2020,” a portion of the report reads. “In some regions, vehicle production fell to near-zero levels towards the end of the year, as the [company’s] main automotive customers temporarily ceased production, particularly at plants in Europe and the Americas. Vehicle production continued at customers in Asia, albeit at much reduced levels.”
The chart below was converted from Yen to USD as of this afternoon.
|Revenue (FY 20)||USD||Trading Profit (FY 20)||USD|
|Automotive Glass||¥ 281 billion
|$2,611,614,000||¥ 6.1 billion
According to the report, the company expects to face a sharp decline in demand during its next fiscal year, which would be caused by the global epidemic. However, it expects the attack from COVID-19 to bottom out gradually from May as economic activities restart. NSG’s fiscal year 2021 forecast will be announced as soon as the impact of COVID-19 is reasonably stabilized and quantifiable, according to the company. The report notes there is not an immediate concern for liquidity at this time and its cash outflow has been minimized. Meanwhile, the company is developing additional improvement actions, which include:
- Suspension of all but most critical capital expenditure projects, including new capacity in Argentina;
- Optimized adjustment of operations, saving input materials and maximizing layoffs, utilizing available government subsidies; and
- Thorough reduction of expenditure, including voluntary reduction of compensation for directors and executive officers.
The report also noted the Americas represent 33% of the NSG’s automotive sales, and its revenues fell due to the translational impact of foreign exchange movements and weakening market conditions.
“In North America, despite OE volumes being slightly below the previous year, profits strengthened, benefitting from further manufacturing efficiency improvements,” a portion of the report reads.
The report indicates a stable demand across Asia and the Americas even though its automotive demand was lessened a bit in Europe. NSG found “a reduction in domestic light vehicle sales” to be a main cause for its decline in its automotive glass during its third quarter.