NSG Group has released its Fiscal Year (FY) 2018 Annual Consolidated Financial Results from April 1, 2017 to March 31, 2018. The company saw an increase in both overall revenue and operating profit from FY 2017 to FY 2018, while the architectural sector showed mixed results.
The company’s revenue for FY 2018 was $5.4 billion (JPY 603.8 billion), up from $5.2 billion (JPY 580.8 billion) in FY2017. NSG Group reported an operating profit of $321.2 million (JPY 35.7 billion) for FY2018, up 19 percent from $268.9 million (JPY 29.8 billion) in FY 2017.
NSG Group’s total assets remained stable compared to last fiscal year at $7.1 billion.
The company also released its forecast for FY 2019, from April 1, 2018 to March 31, 2019. Company leadership projects an increase in its revenue in the next fiscal year, forecasting a half year revenue of $2.8 billion (JPY 310 billion) and a full year revenue of $5.7 billion (JPY 630 billion). NSG Group expects its half year operating profit to be $162.1 million (JPY 18 billion) and its full year operating profit to be $369.3 million (JPY 41 billion). The forecasted full year operating profit is projected to be approximately $48 million more than in FY 2018, showing the expectation that an upward trend will continue.
NSG group’s architectural sector represents 40 percent of its cumulative sales. The sector includes the manufacturing and sale of flat glass and interior and exterior glazing products for both the commercial and residential markets. It also includes glass for the solar energy sector.
The company’s architectural revenue for FY 2018 was $2.2 billion (JPY 241.7 billion), up slightly from $2.1 billion (JPY 237.7 billion). The operating profit for the architectural sector in FY 2018 was reported at $236.4 million (JPY 26.3 billion), down from $243.6 million (JPY 27 billion) last fiscal year.
“Cumulative architectural revenues improved due to an increase in European revenues and the translational impact of a weakened Japanese yen…In Europe, representing 39 percent of the Group’s architectural sales, markets continued to be positive with good demand leading to a stable pricing environment. During the third quarter the Group restarted its float line in Venice, Italy. In Japan, representing 27 percent of the Group’s architectural sales, revenues were below the previous year’s levels due to lower market volumes and other factors,” reads the report. “In North America, representing 13 percent of the Group’s architectural sales, revenues and profits were both below the previous year’s levels. Available capacity has been temporarily reduced whilst the Ottawa, Ill., facility is repaired as announced on May 12, 2017. Sales of solar energy glass fell during a period of re-tooling at a major customer, although shipments of other architectural products were robust. The Ottawa facility was restarted at the end of the third quarter. In the rest of the world, shipments of solar energy glass were impacted by re-tooling at a major customer, but domestic markets were generally improved from the previous year.”
According to the company, market conditions continued to be at a good level for most of NSG Group’s businesses in FY 2018, with results benefiting from an improvement in sales of high value-added products.
“European architectural markets were strong with good levels of demand leading to a stable pricing environment. Architectural markets in North America were positive,” reads the report.
The company recorded a tax charge of $86.2 million (JPY 9.6 billion) following the enactment of tax reform in the U.S.
According to the report, “The headline rate of U.S. federal corporate tax has fallen from 35 percent to 21 percent with a corresponding decrease in the accounting value of the Group’s deferred tax assets. The increased deferred tax charge is a one-time accounting entry only and will not result in an increase in cash taxes payable by the Group. The Group welcomes the reduction in the U.S. headline federal corporate tax rate, which will result in a reduced tax charge on U.S. profits in the future.”
According to the company’s FY 2017 report, North American architectural sales represented 6 percent of the Group’s overall revenue.
The group expects to see a recovery in profitability for FY 2019, in part, because of a full-year’s operation at the Ottawa plant.
NSG Group recently announced that it plans to expand its production capacity of coated glass to support the solar market by upgrading and restarting a suspended float line in Vietnam. The company will update the value of this line in the FY 2019 forecast once it becomes known to the Group.