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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
This is Keiji Taga of Kuraray. Thank you for joining our Fiscal Year 2022 First Quarter Earnings Overview Presentation Conference Call today. Let me share with you our financial results for the first quarter of the fiscal year ending December 31, 2022.
Page 2 is the overview of the first quarter results. In the first quarter of FY '22, despite the resurgence of COVID-19, the recovery trend continued as additional vaccinations were administered in many countries and restrictions on economic activities were eased. As a result, as is shown on the slide, net sales increased by JPY 23.2 billion year-on-year to JPY 167.6 billion. Operating income increased by JPY 5.4 billion to JPY 22.1 billion. Net income increased by JPY 7.4 billion to JPY 12.7 billion. Both sales and profits increased significantly. Foreign exchange and raw fuel results were as shown in the lower half.
Please go to Page 3. This slide shows the first quarter results of net sales and operating income for each segment compared to the same period last year. Although raw material and fuel prices and logistics costs continue to rise from last year, further focus on cost reduction and sales price revisions resulted in year-on-year increases in sales and profits in many of our businesses.
The main reason for the large increase or decrease in the net sales and Trading segment and elimination & corporate is the adoption of the accounting standard for revenue recognition, resulting in the net sales of proxy transactions in the Trading segment being changed from a gross transaction value to net sales amount.
Now Page 4. This slide is presenting a company-wide operating income bridge, a breakdown of factors affected the change in operating income. While raw materials, fuel exchange rate was a negative factor of JPY 14.7 billion, sales price, product mix was a positive factor of JPY 16.6 billion. From this year, inventory valuation gain losses included in others, due in part to the impact of this, despite higher logistics and overhead costs, others gave a positive JPY 1.6 billion increase in operating income.
Please go to Page 5 now. The following section describes the business situation by segment. The first is the Vinyl Acetate segment. This segment recorded an increase in both sales and profits compared to the previous year. For the sales status of each business, please refer to the comments on the right-hand side. Operating income increased by JPY 3.8 billion year-on-year. Reflecting higher raw material and fuel prices, raw materials and fuel exchange rate section was a negative factor of JPY 10.9 billion.
Meanwhile, we proceeded with the price negotiations, and a selling price and product mix was a factor of a plus JPY 10.8 billion, resulting in an overall increase in the segment's operating income. In optical use of poval film, a decision was made to invest in the facilities at the Kurashiki Plant in order to meet the need for larger panel sizes for TVs. The new facility is scheduled to come on stream in the mid-2024.
See Page 6, Isoprene segment. This segment saw an increase in sales and a decrease in profit compared to the previous year. Please see the right-hand side top table for the sales status of each business within the segment. Operating profit for this segment decreased by JPY 0.3 billion. The total of selling price and product mix was a factor of a plus JPY 1.7 billion due to progress in price negotiations. On the other hand, raw materials and fuel exchange rate was affected by the rise in raw materials and fuel prices, resulting in a negative JPY 1.4 billion impact.
Now on Page 7, Functional Materials. In the first quarter, sales and profits in the segment increased year-on-year. Please see the right-hand side top table for the sales status of each business. Raw materials fuel exchange rate was a negative factor of JPY 1.9 billion. Meanwhile, selling price, product mix brought JPY 3.2 billion operating income increase with the price negotiations partly to absorb the increase in raw materials and fuel prices of the previous fiscal year. As a result, operating income of the whole Functional Materials increased by JPY 1.2 billion year-on-year.
Page 8, next is the Fibers and Textiles. This segment also recorded year-on-year increases in both sales and profits. Please find comments on the right-hand side again for the status of each business. Operating income of Fibers and Textiles segment increased by JPY 1.1 billion. Although raw materials and fuel exchange rate was a negative factor of JPY 0.4 billion, volume and sales price product mix gave a positive impact of JPY 1.5 billion combined.
Now Page 9. This slide compares the asset section of the balance sheet with that of at the end of last year. Current assets increased by JPY 10.7 billion. While cash and deposits decreased by JPY 14.6 billion, the JPY 6 billion increase in trade receivables due to higher sales and a weaker yen and the JPY 19.2 billion increase in inventories due to the foreign exchange and higher raw fuel prices were the reason of this. Noncurrent assets increased by JPY 28.3 billion due to an increase from capital investment and a higher valuation of fixed assets of overseas subsidiaries with the weaker yen.
Page 10. This slide shows the liabilities and the net assets section of the balance sheet. Liabilities increased by JPY 11.1 billion due to an increase in notes and accounts payable of JPY 6.0 billion, plus an increase in our long-term borrowings of JPY 3.5 billion. Net assets increased by JPY 27.9 billion. As a result, the equity ratio increased by 0.7 points from the end of fiscal year 2021 to 52.0%.
Page 11. Despite concerns about prolonged Russia-Ukraine situation, hydro fuel prices and ongoing logistics disruptions, we expect the demand to remain firm in the second quarter and have revised our forecast for the first half and the full year of fiscal year 2022. This slide shows the revised FY '22 forecast. The figures are shown in comparison with the previous forecast published on 9th of February 2022.
The forecast for the first half of the year is: net sales to increase by JPY 30 billion to JPY 350 billion compared to the previous forecast; operating income to increase by JPY 5 billion to JPY 38 billion; net income to increase by JPY 2 billion to JPY 22 billion. Due to uncertainties, the forecast for the second half of the fiscal year remains unchanged from the initial forecast at this time. We plan to revise it when the second quarter results are finalized.
This is Page 12. The following pages are for your reference. On this page, the revised forecast is shown in comparison with the actuals of fiscal year 2021.
Page 13 onwards provides segmental comparisons and the details on numerical information on the revised forecast for your reference.
This concludes our presentation. Thank you again for joining us today. [Statements in English on this transcript were spoken by an interpreter present on the live call.]