As Taiyo Nippon Sanso (TNSC) releases its financial figures for the first quarter of 2009, the group notes a bottoming of the recession and improvements in various sectors.

During the first-quarter period (April 1 to June 30, 2009) of fiscal 2009, signs of a bottoming out of the economy were seen in certain sectors thanks to the government’s stimulus packages.

However, against the background of a continued recession in the global economy, conditions in Japan remained severe, with sharp inventory adjustments, major production cutbacks, and drastic curbs on capital investment. In addition, consumer spending remained stagnant amid a worsening employment situation.

In the company’s main user industries – the steel, non-ferrous metals, automotive, and semiconductor industries – a number of plants were closed and production lines stopped in response to the need for sharp inventory adjustments and production cuts.

As a result, overall demand for the products of the TNSC Group remained weak despite certain encouraging signs, such as an upturn in demand for gases for use by makers of ethylene and LCD panels in China and other East Asian countries.

Amid these circumstances, the group posted sales of ¥96,637m on a consolidated basis for the first quarter of 2009, which was down 22.6% year-on-year, operating income of ¥5,042m - down 44.9%, recurring income of ¥4,733m - down 49.8%, and net income of ¥2,622m - down 49.2%.

In the Gas Business the group said that although a fullscale recovery was yet to happen, it had experienced a resurgence in demand in the Japanese market from chemicals companies and certain electronics parts manufacturers such as LCD panel makers.

It also saw some encouraging signs from its automaker customers, where inventory adjustments have ‘just about run their course’.

Overseas, the group experienced sharp drops in demand for gases in America and East Asia, and the effects of the yen’s appreciation compounded this factor, pushing sales down sharply on a year-on-year comparison.

As a result, sales of the Gas Business declined by 22.7% year-on-year, to ¥67,365m, whilst operating income fell 34.9% to ¥4,704m.