Carbon fiber seen lifting Toray's first-half profit to record
Production returns to full capacity as inventory glut subsides
TOKYO -- Toray Industries is expected to report a record operating profit of about 78 billion yen ($692 million) for the six months ending Saturday, up 2% on the year, thanks to an uptick in demand for carbon fiber used in aircraft.
Sales in the April-September first half will likely jump 10% to around 1.05 trillion yen.
Carbon fiber composite materials produced by Toray are used in aircraft such as the Boeing 787. Excess inventory held by distributors had led to lower output through the April-June quarter, but production resumed running at full capacity from July.
The carbon fiber materials segment's operating profit will likely fall 30% to about 11 billion yen, coming in line with estimates that factored in lower production. But for the full year ending March 2018, the company expects the segment's profit to remain roughly flat on the year at 24 billion yen.
Prices of acrylonitrile, a material used in carbon fiber manufacturing, started to surge in August, as Hurricane Harvey devastated Texas and other U.S. regions. But Toray appears to have absorbed the rising costs with higher factory operation rates.
The performance chemicals segment's first-half profit may beat the company's forecast of a 22% rise to 36 billion yen. Resin demand has been healthy, particularly for use in automobiles. Demand has also been strong for lithium-ion battery separators used in electric vehicles.
Toray plans to release first-half results on Nov. 10. It will likely maintain its full-year guidance, expecting net profit to grow 1% to a record 100 billion yen.