Investor Relations
Management Policy
Manegemant Message
The fiscal year ended March 31, 2009, was defined by abrupt change in the operating environment faced by the Nippon Mining Holdings Group. Market prices for crude oil and copper rose to an extent previously not seen in July 2008, driven by such factors as robust demand from the BRIC countries and an influx of speculative money into commodity markets. Subsequently, global financial turmoil triggered by the subprime loan crisis in the United States began to exert a major impact on the real economy. By December 2008, the prices of both crude oil and copper had fallen to around one-quarter of the peak prices seen in July. As the demand from many major users of our products was sharply curtailed, the Company Group was forced to respond by reducing output volumes along with their production adjustments.
Against this backdrop, Nippon Mining Holdings recorded net sales of ¥4,065.1 billion, a decrease of 6% compared with the previous fiscal year. Loss before special items amounted to ¥67.4 billion, compared with income before special items of ¥192.0 billion in the previous period. This loss was principally attributable to an increase in the cost of sales as inventory valuations were affected by the fall in the crude oil price during the second half of the fiscal year. In the fiscal year under review, we posted a net loss of ¥40.8 billion, compared with net income of ¥99.3 billion in the previous period. Excluding the impact of inventory valuation, income before special items fell 36%, from ¥143.2 billion in the previous fiscal year to ¥92.1 billion. Cash dividends per share for the fiscal year ended March 31, 2009, totaled ¥14.00, a decrease of ¥2.00 compared with the previous fiscal year. This comprised an interim cash dividend of ¥8.00 per share and a year-end cash dividend of ¥6.00 per share.
In December 2008, Nippon Mining Holdings reached a basic agreement with Nippon Oil Corporation on management integration of the two corporate groups. This decision was based on recognition by both company groups that the most effective way to reinforce our management bases in order to seize the initiative in the face of structural changes in our operating environment and to survive against increasingly intense competition is to integrate our management resources on an equal footing. Not only will the newly integrated Company Group be the clear leader in terms of both scale and competitiveness in the Japanese petroleum industry, but by combining this position with the high-earnings and growth potential of the Metals business, we are determined to achieve dramatic growth and enhance corporate value as a comprehensive energy, resources and materials group with a strong international presence.
In May 2008, the Nippon Mining Holdings Group prepared its Long-Term Vision towards Fiscal 2015, which describes an optimal business portfolio for the Company Group that has both growth capabilities as well as stability in the fiscal year ending March 31, 2016. Specifically, we are reinforcing cost competitiveness in the midstream businesses, petroleum refining and marketing, and copper smelting and refining. We are also investing intensively in strategic businesses that will drive future growth. We are focusing on resource development projects with a large potential return on investment in the upstream businesses as well as the downstream businesses that leverage the Company Group's competitive advantages, including petrochemicals, electronic materials, recycling and environmental services, titanium and polysilicon for photovoltaic power generation. These strategies are designed to lift the earnings base of the entire Company Group, making it less susceptible to market price fluctuations. We believe that management integration with Nippon Oil will further enhance its possibility to realize these strategies.
The Nippon Mining Holdings Group will continue to provide energy, resources and materials, centered on petroleum and copper, efficiently and reliably. We will also strive to contribute to social and economic development based on harmonious coexistence with the global environment and society. We believe that our decision to embark on management integration with Nippon Oil is the optimal path for the Nippon Mining Holdings Group as we focus on the future growth and development of the Company Group. We will apply our full energies to the realization of the integration.
We look forward to the continued support and encouragement of all our stakeholders, including shareholders, customers, partners and local communities.
Filings with the U.S. Securities and Exchange Commission
Nippon Oil Corporation and Nippon Mining Holdings, Inc. have filed a registration statement on Form F-4 with the U.S. Securities and Exchange Commission (the "SEC") in connection with the proposed joint share transfer. The Form F-4 contains a prospectus and other documents. The registration statement on Form F-4 has been declared effective, and Nippon Oil Corporation and Nippon Mining Holdings, Inc. have arranged to mail the prospectus contained in the Form F-4 to their respective U.S. shareholders prior to the shareholders' meeting at which the proposed joint share transfer will be voted upon. The Form F-4 and prospectus, as they may be amended from time to time, will contain important information about Nippon Oil Corporation and Nippon Mining Holdings, Inc., the joint share transfer and related matters including the terms and conditions of the transaction. U.S. shareholders of Nippon Oil Corporation and Nippon Mining Holdings, Inc. are urged to read the Form F-4, the prospectus and the other documents, as they may be amended from time to time, filed with the SEC in connection with the joint share transfer carefully before they make any decision at the shareholders meeting with respect to the joint share transfer. The Form F-4, the prospectus and all other documents filed with the SEC in connection with the joint share transfer are available, free of charge, on the SEC's web site at www.sec.gov. In addition, the prospectus and all other documents filed with the SEC in connection with the joint share transfer will be made available to shareholders of Nippon Oil Corporation and Nippon Mining Holdings, Inc., free of charge, by faxing a request to Nippon Oil Corporation at +81-3-3502-9860 or Nippon Mining Holdings, Inc. at +81-3-5573-5139, respectively.
Cautionary Statement Regarding Forward-Looking Statements
This announcement contains certain forward-looking statements. These forward-looking statements may be identified by words such as 'believes', 'expects', 'anticipates', 'projects', 'intends', 'should', 'seeks', 'estimates', future' or similar expressions or by discussion of, among other things, strategy, goals, plans or intentions. Actual results may differ materially in the future from those reflected in forward-looking statements contained in this document, due to various factors including but not limited to: (1) macroeconomic condition and general industry conditions such as the competitive environment for companies in energy, resources and materials industries; (2) regulatory and litigation matters and risks; (3) legislative developments; (4) changes in tax and other laws and the effect of changes in general economic conditions; (5) the risk that a condition to closing of the transaction may not be satisfied; (6) the risk that a regulatory approval that may be required for the transaction is not obtained or is obtained subject to conditions that are not anticipated; and (7) other risks to consummation of the transaction.