Nippon Sheet Glass (NSG) Co.’s total revenue and operating profit for the fiscal year 2020 ended on March 31, 2020 were both lower than those of fiscal year 2019. The same decrease happened in NSG’s architectural glass segment, according to NSG’s FY 2020 Annual Consolidated Financial Results.

NSG’s revenue for FY 2020 was $5.17 billion* compared to $5.7 billion in FY 2019. It’s operating profit decreased to $196.8 million this year from $342.5 million in FY 2019, a 42.5% drop.

Architectural, representing 42% of NSG’s cumulative sales, 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. FY 2020 revenue for the architectural glass segment was $2.17 billion, down from $2.3 billion in FY 2019. Operating profit also experienced a drop to $161 million this fiscal year from $239.9 million in FY 2019.

“The group experienced increasingly difficult trading conditions in its core markets during the year with underlying market conditions deteriorating from the third quarter. COVID-19 impacted the group’s technical glass business from January 2020 and severely impacted the group’s automotive and architectural businesses from March 2020,” reads the report. “In architectural, construction activity also weakened significantly towards the end of the year in response to COVID-19 lockdown restrictions, particularly in Europe and South America, but also in other regions. Demand for solar energy glass remains robust. Conditions facing the group’s technical glass business were also negatively impacted by COVID-19, although conditions began to stabilize somewhat by the end of the year.”

Architectural revenues fell from the previous year, mainly due to the translational impact of foreign exchange movements. Currency effects, together with the impact of increasingly challenging market conditions also led to a reduction in reported profits.

In Europe, representing 37% of the group’s architectural sales, revenues fell, due to lower volumes and restructuring projects concluded during the previous year, together with the impact of foreign exchange movements. Prices weakened from the third quarter, reflecting capacity additions in the region. Profits also fell in line with the lower prices, reduced volumes and currency effects. Volumes declined sharply toward the end of the year due to the COVID-19 pandemic.

In Asia, representing 39% of the group’s architectural sales, revenues were similar to the previous year with increased dispatches of solar energy glass largely offsetting difficult domestic markets. Revenues from conventional architectural glass in Japan remained stable, and underlying profitability in Japan was also positive, although reported profits were hit by a one-off inventory valuation adjustment in an earlier quarter. On March 31, 2020 the group announced the suspension of the Chiba #1 furnace effective from July 2020. On January 30, 2020 NSG

announced the commencement of production at its second furnace in Vietnam dedicated to the production of glass for solar energy.

In the Americas, representing 24% of NSG’s architectural sales, revenues and profits were below the previous year. Domestic market conditions in North America were more challenging than the previous year, with increased flat glass supply causing an erosion of market prices. Sales of glass for solar energy improved however.

In South America, revenues fell mainly due to the translational impact of foreign exchange movements. In addition, volumes were impacted by COVID-19 towards the end of the year.

NSG has not published guidance for fiscal year 2021 due to the current economic climate created by the COVID-19 pandemic.

“In response to the COVID-19 pandemic and a lack of demand for glass, the group has taken appropriate action to suspend or reduce production at various plants with the utmost priority on health and safety of its employees. The group is focused on saving cash costs in a variety of areas and is also actively seeking government assistance where such programs are available. The group will continue its programs of disposing of non-core assets and improving the efficiency of working capital,” reads the report. “Additionally, the group will prioritize capital expenditure to focus on strategically important and urgent projects, suspending expenditure on other projects where appropriate. The group expects a gradual recovery of demand during FY2021, but it is not clear what the timing and extent of this recovery is likely to be. Therefore, the group does not yet have sufficient clarity on the expected FY2 021 financial results to enable a forecast to be published. As the short and medium-term impact of the COVID-19 pandemic becomes clearer, the group will provide guidance on its FY 2021 forecast and on its medium-term plan and strategy.”

*Editor’s Note: The financial results were converted from Japanese Yen to U.S. dollars on May 26, 2020.