Mitsubishi Materials Corp. said Aug. 7 that net profit for the first quarter of its fiscal 2020 tumbled by three-quarters on a yearly basis.
Earnings fell to ¥2.41 billion from ¥9.88 billion year over year as net sales fell 12.8% to ¥366.26 billion and operating profit fell 46.8% to ¥8.99 billion. An economic slowdown in China amid slowing exports and industrial production in Japan ate away at profits.
The company's metals segment booked a 21.1% fall in net sales to ¥151.9 billion due to lower copper production related to operational issues at its Onahama Smelting and Refining Co. Ltd. business and exacerbated by lower prices for the red metal, while lower grades weighed on the production of gold and other valuable metals.
Results also included a ¥10.42 billion provision related to a surcharge payment order for Mitsubishi Materials' Universal Can Corp. unit, which was suspected of violating Japan's Antimonopoly Act after being raided by the Japan Fair Trade Commission in February 2018. The unit was recently served with a regulatory notice concerning a hearing of opinions related to a cease and desist order.
The provision prompted Mitsubishi Materials to lower its earnings forecast for the first half of fiscal 2020 to ¥5 billion from ¥12 billion, although it maintained its full-year earnings guidance at ¥30 billion.
In September 2018, three company units were indicted by Japanese prosecutors over suspicion of violating anti-competition laws, with former executives facing prosecution for involvement in a product data falsification scandal. In June 2018, the company restructured its top management for the first time after accepting responsibility for the 2017 data-tampering scandal that affected over 762 customers.
As of Aug. 7, US$1 was equivalent to ¥105.70.