Pilkington parent issues further profit warning as pandemic grows
The Japanese parent company of St Helens glassmaker Pilkington has issued a profits warning due to the worldwide coronavirus crisis.
It follows a revision of forecasts almost two months ago by Nippon Sheet Glass, which also announced the shutdown of one of its glass plants at Chiba, in Japan.
It said that, considering the increasing uncertainties in the business environment, it has decided to take swift actions to bolster its capacity utilisation and protect profitability.
The group’s supply of glass to the domestic market in Japan remains unchanged.
The other float furnace at Chiba will continue to supply architectural glass and the products supplied from Chiba #1 Furnace will be imported from the group’s overseas locations in the future.
The group said it expects fixed cost reductions from the suspension of Chiba #1 Furnace in financial year 2021 and onward, while the non-cash provisions are recognised in financial year 2020.
It said, with the recognition of exceptional costs linked to the closure and the impact of coronavirus, profit before taxation, loss for the period and loss attributable to owners of the parent company would worsen against the previous forecast for the full year for 2020, announced earlier this year when it significantly downgraded sales and profits forecasts.
At the same time, the worldwide expansion of COVID-19 infections are having a significant direct and indirect impact on the group, particularly in its main business areas of the architectural and automotive glass.
In the automotive glass market, the suspension of production by vehicle manufacturers across the globe has led to a sharp drop in demand, especially since mid-March.
In the architectural glass market, the economic impact of lockdowns, particularly in European cities, has begun to soften demand.
In response to such fluctuations in demand and complying with the national and local governments’ orders and guidelines on daily life such as curfew, the group’s business activities in countries around the world are also being drastically changed or reduced.
Taking account of these circumstances, the group is currently examining their impact on forecast for full year 2020 and will announce them as soon as they are confirmed.
The group said it has sufficient cash on hand and unused credit facilities and is taking further steps to secure funding going forward.