By Kosaku Narioka
Denka Co. shares rose sharply in early commerce on Wednesday after the Japanese chemical firm introduced it might exit its cement enterprise, which is affected by excessive manufacturing prices.
The shares had been just lately 8.4% larger at 3,490 yen after rising as a lot as 8.9% earlier.
Denka stated after market closed on Tuesday that it deliberate to promote its cement gross sales enterprise to Taiheiyo Cement Corp. on the finish of March 2023 and exit from its cement manufacturing enterprise across the first half of 2025.
Nomura analyst Takaomi Kono stated in a analysis be aware that Denka’s departure from the cement enterprise would probably be optimistic for its share costs. Mr. Kono stated Denka’s cement market share is barely about 3% in Japan, the place demand has been trending decrease.
Nomura anticipated Denka’s cement enterprise to endure an working lack of Y5.0 billion ($33.8 million) for its fiscal yr ending March 2023 resulting from a pointy rise in costs of the coal that’s utilized in cement manufacturing.
Denka lowered its fiscal-year earnings steering, projecting a 29% drop in internet revenue to Y18.50 billion, in contrast with its earlier view of Y29.00 billion in internet revenue, because it anticipated particular losses of Y19.0 billion because of its exit from the cement enterprise.
The Topix subindex for chemical firms was just lately 1.6% larger and the Nikkei Inventory Common was up 1.1%.
Write to Kosaku Narioka at kosaku.narioka@wsj.com
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