On August 5, 2008, Asahi Glass Co. (AGC), the second largest supplier of LCD glass behind Corning, reported financial results for the first half of FY2008. Roughly, Corning holds a 60% market share in terms of LCD glass manufacturing capacity while AGC has about 20%. Others such as NEG and NHT split the rest. The financial results showed that operating profits are increasing due to its LCD glass business.
Electronics & Display Group 1H’08 Results
- Sales: Down 0.7% to JPY2,078 million
- Display Sales: Up 22.0% to JPY1,741 million
- Electronics Materials Sales: Down 48.0% to JPY353 million
- Operating Profit: Up 77.6% to JPY822 million, OP Margin is 39.5%
Demand for glass substrates for TFT LCD applications continued to be strong while AGC’s manufacturing productivity improved. Shipments of some display related materials slowed. AGC withdrew from the small/medium sized display panel business. FOREX fluctuations in 1H’08 had a negaive impact on operating margins (-JPY11 million versus 1H’08) and on sales (-JPY84 million versus 1H’08). Nearly all sales were sold to the Japan and Asia regions, almost evenly split. Operating profits were heavily Japan based.
The Electronics & Display group generated 26.9% of sales (26.8% in Q1’08) for AGC and accounted for 71.7% of operating profits in Q2’08 (78.5% in Q1’08).
Electronics & Display Group FY2008 Forecast
- Sales: Down 7.6% Y/Y to JPY4,300 million
- Operating Profits: Up 28.6% Y/Y to JPY1,520 million
- CAPEX: Up 4.1% Y/Y to JPY1,100 million
For 2008, AGC is expecting total sales for its Electronics & Display group to decrease 7.6% Y/Y to JPY4,300 million, which is a bit less than what was previously forecasted (JPY4,400 million). Operating profits are expected to increase 28.6% Y/Y, thanks largely to the Electronics & Display group), to JPY1,520 million, up from an original forecast of JPY1,370 million.
AGC, like many other large companies, are concerned about a global slowdown. High price levels for raw materials and energy prices will also be a major factor in 2H’08. AGC’s Electronics & Display group postponed regular repairs for its glass manufacturing facilities in 1H’08 due to strong demand for LCD glass. However, repairs will be implemented for operational adjustments based on panel manufacturers.
Source: AGC (PDF)
[tags]Asahi, Asahi Glass Co., AGC, LCD Glass[/tags]