Showa Denko’s Aluminium Unit Revises Profit Target for 2010

Showa Denko revised the outlook operating profit outlook for aluminium & other unit upward to 8.5 billion yen for the year ending December 2010 from 6 billion yen of profit as of April, which is the first operating profit in 3 years. The firm also revised the sales outlook to 175 billion yen from 165 billion yen. The firm regains profitability for the unit under recovering demand along with the past restructuring effort.

The unit posted 4.6 billion yen of operating profit for the first half year compared with 6.8 billion yen of loss in same period of 2009 while the sales increased by 14.7% to 89.1 billion yen.

The rolling business operated at more than 90% of the capacity in the first half year due to firm demand for high purity foil for capacitor and aluminium cylinder for laser beam printer. The automotive heat exchanger business enjoys higher sales mainly for Chinese automakers including transplants of Honda Motor and Volkswagen.

The firm expects strong demand for Chinese heat exchanger and US continuous casting bar through the year. The firm also expects full capacity operation for high purity foil for capacitor through the year.

The aluminium & other unit posted 200 million yen of operating loss in 2008 and 4.2 billion yen of loss in 2009 while the unit posted 8 billion yen of profit for 2007. The sales were 232.8 billion yen in 2008 and 168.8 billion yen in 2009 compared with 257.8 billion yen in 2007.