AGC Inc.’s total net sales and net sales for its glass segment were down in the first quarter of 2020 compared to the first quarter of 2019. That’s according to the company’s first quarter 2020 consolidated financial results. For the three months ended March 31, 2020, AGC’s net sales were $3.33 billion*, down 1.1% from the company’s net sales in the same period of 2019, which were $3.37 billion. Net sales for the company’s glass segment, which includes flat glass, low-E glass, decorative glass and architectural fabricated glass, were $1.58 billion in the first quarter, down from $1.74 billion in Q1 2019.
While Q1 2020 net sales decreased compared to Q1 2019, AGC’s operating profit experienced a 7% increase. Operating profit for the three months ended March 31, 2020 was $208 million compared to $194 million in the same period last year. However, the company’s glass segment experienced an operating loss of $24 million in Q1 2020 compared to an operating profit of $32.6 million in Q1 2019. That’s a 173.8% decrease. None of the company’s other segments experienced negative changes in operating profit year-over-year.
AGC has revised its consolidated financial forecasts and dividend forecast for the fiscal year ending December 31, 2020, which were announced on February 5, 2020 due to the COVID-19 pandemic. Its net sales have been revised downward from nearly $7 billion to $6.06 billion, a 13.3% reduction. AGC’s operating profit has been updated from $466 million to $233 million, a 50% drop.
“Due to the global spread of COVID-19, the AGC Group has been impacted by lower demand and customer production adjustments in several of its businesses, resulting in lower shipments. In particular, the glass segment is expected to see a significant decline in sales and profit in the second quarter of the year due to the impact of the automotive business in China in the first quarter and the full-scale adjustment of operations in the architectural glass and automotive glass businesses from mid-March,” reads a notice from the company regarding the forecast revision. “The outlook on the COVID-19 outbreak is still grim, and future demand trends remain uncertain. Under these circumstances, there are many undetermined factors that may affect the group’s performance at this time, and it is difficult to make a reasonable calculation of financial forecasts. Therefore, the group has temporarily withdrawn its full-year consolidated financial and dividend forecasts and will disclose them again when reasonable forecasts become available.”
*Editor’s Note: The financial results were converted from Japanese Yen to U.S. dollars on May 18, 2020.