DIC Reports Consolidated Financial Results for First Nine Months of 2022

DIC Corporation reported its consolidated financial results for the nine months ended Sept. 30, 2022. In the nine months ended September 30, 2022, consolidated net sales climbed 29.1%, to ¥795.2 billion ($5.5 billion).

DIC reports that this sharp increase, coming amid global economic turmoil caused by such factors as rising inflationary pressure worldwide, the protracted crisis in Ukraine and restrictions on movement in the People’s Republic of China (PRC) under a stringent “zero-COVID” policy, was attributable to ongoing efforts to adjust sales prices across all segments in response to elevated energy, logistics and raw materials costs, as well as to the influence of yen depreciation on results denominated in other currencies after translation.

In the Color & Display segment, the margin of improvement in net sales was boosted by the addition of sales from the C&E pigments business, which was not included in the scope of consolidation in the first half of the previous fiscal year. Nonetheless, shipments of numerous products stalled in all regions, hindered by recent signs of an economic slowdown in Europe and a delay in the PRC’s recovery from pandemic lockdowns.

Operating income edged down 1.2%, to ¥32.9 billion ($228 million). This decrease was due to dwindling shipments of a wide range of products and was despite continued efforts to pass on higher costs by modifying sales prices.

Packaging & Graphic segment sales rose 23.3%, to ¥397.3 billion ($2.75 billion). In materials for packaging, used primarily to package food products, sales of packaging inks increased, supported by continued efforts to modify sales prices. Nonetheless, shipments in Asia were down from the corresponding period of the previous fiscal year, as those in the PRC remained listless, hampered by ongoing zero-COVID measures.

In publication inks, which center on inks for commercial printing and news inks, demand in Japan failed to recover for use in pamphlets and event-related printed materials, while that in Europe fell due to waning economic conditions, causing shipments in both regions to slump, although sales increased thanks to assertive sales price adjustments worldwide.

In jet inks for digital printing, demand was down for industrial applications, including outdoor signage (billboards and posters) and banners, as well as for commercial printing, but sales rose as yen depreciation boosted results denominated in other currencies after translation. The inclusion of the sales of Italian adhesives manufacturer Sapici S.p.A., the acquisition of which was completed in January 2022, also bolstered segment sales.

Segment operating income, at ¥13.8 billion ($95 million), was down 14.1%. Despite seeking to counter higher energy, logistics and raw materials costs worldwide by modifying sales prices, such attempts struggled to keep pace, as a consequence of which operating income declined.

Color & Display segment sales rose 78.9%, to ¥195.3 billion ($1.35 billion). Owing to the addition of sales from the C&E pigments business, sales of pigments for coatings, plastics and cosmetics increased significantly. Segment operating income, at ¥7.2 billion ($50 million), was up 127.5%. This steep gain was due largely to the absence of ¥4.2 billion ($30 million) in one-time expenses recorded in the corresponding period of fiscal year 2021 in association with the integration of the C&E pigments business.