NSG Group reported a drop in revenue and operating profit for each of its segments in the first quarter (Q1) of fiscal year (FY) 2021 (April through June 2020) compared to FY2020 Q1. In total, the company reported $859.9 million* in revenue in Q1 of FY2021 compared to $1.4 billion in the same period of FY2020, a 40% year-over-year decline. NSG experienced an operating loss of $5.6 million in the first quarter of 2021, compared to a profit of $82.3 million in the same period in 2020.
The results were affected by a reduction in demand associated with the global COVID-19 pandemic and, to a lesser extent, the translational impact of foreign exchange. However, the company reports it experienced a rebound in June.
Architectural Glass Segment
In the Americas, representing 21% of the company’s architectural sales, revenues and profits were below the previous year due to the impact of COVID-19. As in other regions, NSG Group suspended production at certain facilities to match output to the prevailing level of demand. Construction of the company’s new solar glass facility in North America continued during the quarter with a planned start date scheduled for the end of the calendar year 2020. However, construction of the new architectural glass facility in Argentina has been suspended.
Europe, which represents 36% of the company’s architectural sales, saw revenues fall due to lower volumes associated with the pandemic. Glass production was either suspended or significantly reduced at many of NSG’s European manufacturing facilities, although some lines returned to more normal production levels toward the end of the quarter.
In Asia, representing 43% of the company’s architectural sales, revenues were also below the previous year, although the decline was less significant than that experienced in Europe or the Americas. Profits improved however, partly due to robust sales of glass for solar energy, which were largely unaffected by COVID-19, and partly due to a reduction of costs in Japan. NSG Group temporarily suspended production at some architectural plants in the region and, as previously announced, ceased production at the Chiba, Japan, #1 furnace and at a furnace in Malaysia toward the end of the quarter.
|NSG Group Financial Results by Segment (in millions of U.S. dollars)|
|FY2020 Q1||FY2021 Q1||FY2020 Q1||FY2021 Q1|
|Architectural Glass||$560.5 m||$420.1 m||$53.3 m||$25.3 m|
|Technical Glass||$94.5 m||$75.8 m||$16.8 m||$13.1 m|
|Source: NSG Group’s FY2021 1st Quarter Results|
FY 2021 Forecast
NSG Group expects total revenue of $4.3 billion in FY2021, compared to $5.2 billion in FY 2020. However, its FY2021 forecast shows an anticipated operating loss of $187.1 million compared to an operating profit of $177.8 million in FY2020.
The FY2021 forecast is based on the gradual demand recovery from the first quarter throughout the year and the execution of an urgent cost savings project, aimed at restoring business profitability.
*Editor’s Note: The financial results were converted from Japanese Yen to U.S. dollars on August 12, 2020.