DIC Reports Financial Results for First Nine Months of 2023

DIC Corporation reported its consolidated financial results for the nine months ended Sept. 30, 2023. In the nine months ended September 30, 2023, consolidated net sales declined 1.7%, to ¥781.6 billion ($5.167 billion). Operating income dropped 59.9% to ¥13.2 billion ($269 million

“In the nine months ended September 30, 2023, consolidated net sales edged down 1.7%, to ¥781.6 billion,” DIC reported. “Uncertainties persisted in the global economy, owing to such factors as the continued pursuit of inflation-curbing monetary policies in the United States and Europe, geopolitical risks attributable to the protracted crisis in Ukraine, and a slowing economic recovery in the People’s Republic of China (PRC) caused by a slumping real estate sector, among others, as a result of which demand for goods flagged in all regions and efforts to modify inventories were seen in various industry sectors.

“Operating income fell 59.9%, to ¥13.2 billion,” DIC noted. “This sharp decrease was despite efforts in all segments to pass on rising costs, including by modifying sales prices, together with a gain in the Packaging & Graphic segment, and was largely a result of sinking shipments of pigments, mainly those for coatings and for plastics, in the Color & Display segment, and of high-value-added products, including those in the Functional Products segment.

“Another contributing factor was the temporary suspension of operations at certain production sites in the United States and Europe, a move aimed at paring inventories of pigments, notably those for coatings and for plastics.”

Packaging & Graphic segment sales rose 1.9%, to ¥405 billion ($2.68 billion).

“Segment sales advanced 1.9%, to ¥405.0 billion. Shipments of packaging inks, used chiefly on packaging for food products, were up in the PRC, underpinned by efforts to cultivate new customers, but slumped overall as rising prices depressed demand for consumer goods in other regions,” according to DIC. “Nonetheless, sales of these products were essentially level thanks to successful efforts to adjust sales prices worldwide.

“Sales of publication inks, which center on inks for commercial printing and news inks, decreased, despite moves to modify prices in all regions, which lifted sales in Japan, as dwindling demand and price competition with rival manufacturers pushed shipments down in the Americas and Europe, as well as in Asia.

“Sales of jet inks, used in digital printing, were bolstered by the positive impact of a weak yen on sales denominated in other currencies, which countered a slow recovery in demand, especially from overseas customers, and persistently weak shipments, amid inventory adjustments and other measures implemented in response to rising prices and interest rates in the United States and Europe.”

Segment operating income, at ¥13.9 billion ($92 million), was down 0.7%. DIC noted that operating income overseas was up overall, led by increased shipments of packaging inks in the PRC, together with moves to maintain sales prices for packaging inks and publication inks in the Americas and Europe.

Color & Display segment sales were down 10.1% to ¥175.6 billion ($1.17 billion). DIC reported that pigments for coatings and for plastics, which account for a significant proportion of segment sales, were down overall due to declining demand and moves by customers to curtail inventories as a result of Europe’s slowing economic growth rising prices in the US.