Like many companies in the glass industry, NSG Group still hasn’t returned to its pre-pandemic financial results. The company also plans to reduce its global headcount by more than 2,000 by identifying redundancies and retirement programs. The goal of the reductions and other cost-saving measures is to improve the company’s financial situation in fiscal year 2022.
The company’s revenue for the third quarter of fiscal year 2021 (the three-month period ending December 31, 2020) was $1.29 billion*, down slightly from $1.31 billion in the same period of fiscal year 2020. NSG Group’s operating profit for Q3 2021 (after COVID-19-related exceptional items) was $34.4 million, an improvement from $29.6 million in Q3 2020.
When looking at the cumulative nine-month period from April 1, 2020 to December 31, 2020, the company’s revenue was $3.4 billion, down from nearly $4.1 billion in the same quarter of fiscal year 2020. Operating profit also took a hit year-over-year. The operating profit for the cumulative three quarters of FY 2021 was $76.7 million, less than half of the cumulative Q3 FY 2020 operating profit of $172.3 million.
Despite the decrease in the year-over-year comparisons, NSG Group’s markets recovered further during the third quarter of the year, according to the company’s financial report.
“Economic activity continues to be significantly impacted by the COVID-19 pandemic, although a rising number of cases towards the end of the third quarter is, in many regions, being countered by the imposition of social rather than industrial lockdowns, with a more limited impact on demand for the Group’s products. Architectural markets experienced robust activity, especially in Europe and South America,” reads the report. “Demand for solar energy glass remained strong, largely unaffected by COVID-19 factors. Automotive markets also recovered from the low levels experienced earlier in the year, with demand during the third quarter similar overall to the previous year. Technical glass markets mainly continued to be somewhat below the previous year.”
NSG Group’s architectural segment, which represents 44% of cumulative revenues, includes the manufacturing 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.
Revenue for the architectural segment was $1.5 billion in the cumulative three quarters of FY 2021, a drop from $1.7 billion year-over-year. The segment’s operating profit was $110.1 million, compared to $133.4 million in the same period in 2020.
Architectural revenues and profits fell from the previous year due to the impact on demand of the COVID-19 pandemic, particularly during the first quarter of the year. In the Americas, which represents 24% of the company’s architectural sales, cumulative revenues and profits were below the previous year due to the impact of the COVID-19 pandemic especially during the first quarter of the year. Results recovered in the second and third quarters, with volumes in South America being particularly strong. On November 12, 2020 NSG Group announced that its new float furnace, built to produce transparent conductive oxide (TCO) coated glass for solar panels in Luckey, Ohio, began operations.
In Europe, which represents 39% of the company’s architectural sales, cumulative revenues fell due to lower volumes associated with the COVID-19 pandemic during the first quarter. Volumes improved markedly during the second quarter as production resumed at facilities that had previously been suspended, and strengthened further during the third quarter. Price levels also recovered in line with an increased level of market demand. The recovery of profitability also was aided by a strong operational performance and tight cost control.
In Asia, which represents 37% of NSG Group’s architectural sales, cumulative revenues were also below the previous year due to the COVID-19 pandemic. 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. The suspension of production at the Chiba #1 furnace and also at a furnace in Malaysia towards the end of the first quarter lowered fixed costs and contributed to the improved profitability.
*The financial information was converted from Yen to U.S. dollars on February 10, 2021.