Volume 47, Issue 9- September 2012

FinancialFlash


NSG Reports 17.8 Percent Drop in Revenue for First Quarter

The NSG Group has released its financial report for the first quarter of the fiscal year. The company reports that while its architectural markets in North Market are stable, they are “still significantly below the level of 2008.”

The company reports that sales of its solar energy glass fell in North America during the quarter, while domestic residential and commercial volumes remained flat.

Overall, company officials say the architectural market “has been below expectations,” and that its senior managers have agreed to reduce their compensation, “reflecting their clear commitment to an early turnaround of the Group’s performance.” Worldwide, the company reports a revenue of approximately $669.4 million (52,371 million Japanese Yen), compared with approximately $814.3 million for the same period last year—a 17.8 percent drop.

Company officials report that its architectural markets were depressed in Europe, “as economic uncertainty affected levels of public, commercial and residential construction.”

“Volumes declined from previous quarters, and prices weakened across most regions,” writes the company.

In Japan, NSG saw a “low level” of activity, along with some signs of improvement, according to the company.

In South America, the architectural market is described as “challenging, with declining demand.”

At the same time as the company announced its fiscal first-quarter results, it also announced that the members of its senior management team have decided to voluntarily reduce their compensation for the period of August 2012 to June 2013.

Compensation for Katsuji Fujimoto, director and chair, and Tomoaki Abe, director and vice chair, will be reduced by 30 percent and 20 percent, respectively. The base compensation of Keiji Yoshikawa, director, representative executive officer, president and CEO, will be reduced by 30 percent. As no performance-based compensation payments have been awarded, Yoshikawa’s total compensation will therefore decline by approximately 50 percent for the time period. Yoshikawa was named president and CEO in April, when Craig Naylor resigned from the role (see related story in May USGlass, page 10).

Vitro Reports Decline in Flat Glass Sales
Vitro has released its second-quarter figures, which include a decrease of 3.9 percent for flat glass sales. According to the San Pedro, Mexico-based company, sales declined from $146 million in 2011 to $141 million this year.

While there was a slight rise in sales volume for its construction sector, Vitro’s domestic sales have fallen 3.7 percent from $94 million to $91 million. The company attributes the drop in domestic sales attributed to the 15.8 percent peso depreciation since 2011.

Additionally, Vitro reported its flat glass export sales have decreased by 7.1 percent—falling to $39 million this quarter from $42 million last year. Company officials say the decline occurred because of a low demand from South and Central America. In regards to its foreign subsidiaries’ sales, Vitro reports an increase of 7.6 percent, stemming from $9.6 million in 2011 to $10.6 million for the same period in 2012.

Hugo Lara, CEO, says the company reported “solid business growth” overall during the 2012 second quarter.

“EBITDA remained strong, driven by a better price mix and sales of higher value added products,” Lara says. “Increased production levels and lower natural gas prices, one of our main inputs, resulted in better fixed cost absorption throughout our facilities, and also contributed to this performance. These factors more than offset the increase in electricity prices, particularly at flat glass, derived from the electricity and steam supply interruption … ”

According to Vitro, because of an increase in higher value and “strong price-mix” of glass products and flat glass there was a rise in consolidated sales if measured in Mexican currency, but the company reports a 3 percent decrease of sales ($447 million) when measured in U.S. dollars.


USG
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