A Second Quarter Rebound’s Not Enough to Make Up for Glass Maker’s First Quarter Pandemic Hit

While the COVID-19 pandemic continues to affect the NSG Group’s year-over-year revenue and operating profit comparisons, demand recovered significantly from the first to second quarter of 2021 due to global easing of lockdowns, according to the group’s FY2021 2nd Quarter Consolidated Financial Results for the period of July 1-September 30, 2020.

The company’s Q2 2021 revenue was $1.25 billion*, compared to $1.36 billion during the same period last year. NSG Group’s operating profit was $36.6 million in the second quarter of FY2021, down from $58.9 million in the same quarter of FY2020. However, that is an improvement from the first quarter, when pandemic-related causes led to an operating loss of $5.6 million.

Second quarter year-over-year comparisons don’t show the entire picture of how hard the glass manufacturer was hit by pandemic measures. In the first half of FY2021, NSG Group’s total revenue was $2.14 billion. That’s down from $2.78 billion in the first half of FY2020. More significantly, the company’s first half 2021 operating profit was less than a quarter of what it was in the same period last year. The company’s first half 2021 operating profit was $30.9 million, a sharp decline from $143.7 million in the same period of FY2020. This largely was driven by operating losses in its automotive and “other” segments.

Revenue for NSG Group’s architectural glass segment rebounded in Europe and the Americas but dropped slightly in Asia from Q1 to Q2 2021. The segment, in Europe and the Americas, even saw growth compared to the second quarter of 2020. Architectural, which represents 45% of the company’s cumulative revenues, includes the manufacture and sale of flat glass and various interior and exterior glazing products within the commercial and residential markets. It also includes glass for the solar energy sector.

NSG Group’s Architectural Segment Financial Results
Revenue: Q2 2020 Q1 2021 Q2 2021
Europe $213.2 million $154.4 million $214.2 million
Asia $237.3 million $185.2 million $179.4 million
Americas $126.4 million $93.6 million $129.3 million
Total Revenue: $576.9 million $433.1 million $522.9 million
Total Operating Profit: $39.5 million $26 million $44.4 million
Source: NSG Group’s FY2021 2nd Quarter Consolidated Financial Results  

While there was some growth in the architectural glass segment, first quarter 2021 results held the segment back when comparing the first half of FY2021 to FY2020. The segment’s cumulative revenue dropped from $1.15 billion in the first half of last year to $956.1 million in the first half of FY2021.

In Europe, volumes improved markedly during the second quarter and production was resumed at facilities that had previously been suspended. Price levels also recovered during the second quarter, in line with the increased level of demand. The recovery of profitability also was aided by a strong operational performance and tight cost control.

While architectural sales and revenues in Asia were below the previous year’s level, profits improved, 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. The suspension of production at the Chiba #1 furnace and also at a furnace in Malaysia toward the end of the first quarter lowered fixed cost and contributed to profit improvement. During the second quarter, the group restarted glass production at other facilities in the region that had been suspended temporarily during the first quarter.

In the Americas, volumes in South America were particularly strong. Construction of NSG Group’s new solar glass facility in North America continued, with a planned start date scheduled for mid-November 2020.

The company’s technical glass segment only saw slight changes from Q1 FY2021 and has not yet recovered to its levels from the same period last year. The segment’s cumulative revenue for the first half of FY2021 was $159.2 million compared to $194.9 million in the same period last year. Its operating profit during the first half of FY2021 was $24.1 million, down from $33.7 million in the same period last year.

FY2021 Forecast

Based on better than forecasted second quarter results, NSG Group has altered its full year forecast upward. The company now expects a full year revenue of $4.63 billion and operating profit of $86.8 million.

*Editor’s Note: The financial results were converted from Japanese Yen to U.S. dollars on November 5, 2020.

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