Zeon elastomers unit reports decline in operating profit

TOKYO—Zeon Corp.'s elastomers business, which manufactures synthetic rubbers, latexes and rubber chemicals, has reported a decline in operating profit as volumes fell and costs continued to rise for materials and logistics.

First quarter operating profit dropped 32 percent year-on-year to $30.2 million, on 10-percent higher sales of $393.8 million, said Zeon July 29.

Higher sales were achieved on selling price adjustments in conjunction with the sharp rise in raw material prices.

Profits, said Zeon, were down due to rising raw materials prices, higher freight costs and a 14-percent decline in volumes resulted from regular repairs at synthetic rubber plants.

Profits saw a $11.8 million impact from the volumes decrease, while raw material prices and freight costs had negative effects of $63.3 million and $14.7 million, respectively.

These, Zeon said, were partially offset by price adjustment gains of $56.7 million and a positive exchange impact of $18.4 million.

Synthetic rubbers and rubber chemicals volumes fell 6 percent year-on-year, while latexes saw a decline of 40 percent, due to excess distribution inventory, said Zeon.

Sales of synthetic rubbers grew 22 percent year-on-year to $27.2 million, while rubber chemicals recorded a 23-percent increase to $81.7 million.

Revenue within the latex business, however, fell 52 percent to $26.5 million.