Petrotahlil --Mitsui Chemicals’ net profit for the fiscal year ending March 2021 posted 70.3% growth despite lower sales, as profitability of its basic materials business benefited from better overseas markets.

Lower group sales were attributed to declines in product prices, dragged down by falls in values of naphtha and other raw materials and fuel amid the coronavirus pandemic, the company said on Thursday.

Its basic materials segment reported a 12.6% year-on-year decline in sales to Y541.4bn, but operating income before special items more than doubled to Y19.6bn from Y9.4bn in the previous fiscal year “due to improved overseas market”.

Mitsui Chemicals said that operating rates at its naphtha crackers were lower than the previous fiscal year due to decreased demand for downstream products, caused by the impact of the coronavirus.

“Performance of polypropylene was affected by slowing demand for automotive products. For bisphenol A (BPA) and acetone, the overseas market was at a higher level than the previous fiscal year,” the Japanese producer said.

For the current fiscal year ending March 2022, Mitsui Chemicals is projecting higher earnings, in line with the global economic recovery from a pandemic-induced slump in 2020.

Basic materials should be able to generate sales of Y635bn and yield an operating profit before special items of Y36bn, based on the company’s forecasts.

“In the chemical industry, although demand is expected to expand due to signs of economic recovery, chemical companies should remain vigilant regarding fluctuations of raw materials and other chemical product markets,” it said.

($1 = Y109.7)