Good evening. I'm Motohiro Takeuchi, Chief Financial Officer of Showa Denko. Thank you very much for your consistent interest in our business performance. Here, I'd like to express my sincere sympathy for the people affected by novel coronavirus, and the people who suffer in the difficult condition due to the pandemic. I would like to explain the financial results of the first quarter FY 2021. As some of you may notice by the front page, this time, the financial results presentation material, including its design, were renewed. We try to make it simple and clear. Given the current situation, this material is more focused on the quarter-on-quarter comparison. We expect that it will serve you to deepen your understanding of our business overview. Please turn to page two. This is the overview of the financial results of the first quarter FY 2021.
Showa Denko Materials segment has been included since July 2020. The new consolidation is reflected this year in year-on-year comparison. Net sales were JPY 339.7 billion, up JPY 2 billion quarter-on-quarter, up JPY 167.9 billion year-on-year. In Petrochemicals segment, market price rise. In Showa Denko Materials segment, strong demand for semiconductors contributed. Operating income was JPY 20.8 billion, up JPY 24.9 billion quarter-on-quarter, up JPY 18.3 billion year-on-year. In Showa Denko Materials segment, semiconductor-related business was robust. Graphite electrode business in Inorganics segment turned profitable due to the elimination of expensive raw materials and the reversal gain on the devaluation of inventory book value, which was conducted in the previous year. Impact of COVID-19 shrunk to JPY 2 billion in Showa Denko Materials segment. Other segments' impact were relatively minor, mitigating the total impact.
Integration cost with Showa Denko Materials are as shown here. Please turn to page three. Number of consolidated subsidiaries remained unchanged from the end of the previous fiscal year as 151. Equity method applied companies were 14, as one affiliate, Toyama Jiko Hatsuden Company, Limited, was reclassified into equity method company due to increased significance. Selected data are as shown here. As for exchange rates, for US dollar, yen depreciated both for the January to March average and as of the end of March. For euro, also yen depreciated for January to March average. Domestic naphtha price for January to March average increased 24%, affected by crude oil price surge. Aluminum LME price increased 8.8%, impacted by demand recovery of manufacturing industries. Please turn to page four. Summary of consolidated results of the first quarter FY 2021 is shown with a comparison with the previous quarter.
Net sales were JPY 339.7 billion, up JPY 2 billion, or 0.6% quarter-on-quarter. Operating income was JPY 20.8 billion, substantially up by JPY 24.9 billion quarter-on-quarter. Sales and operating income will be explained in detail on page six and onward. Ordinary income was JPY 25.1 billion, up JPY 32.3 billion quarter-on-quarter. Non-operating income and expenses and extraordinary profit and loss will be explained on page 16 and onward. Income taxes increased. Net income attributable to owners of the parent was JPY 5.2 billion, up substantially by JPY 23.8 billion quarter-on-quarter. EBITDA increased JPY 21.8 billion quarter-on-quarter to JPY 50 billion. EBITDA margin to sales was 14.7%, up 6.3 point. Please turn to page five. This slide shows operating income change breakdown by factor.
Operating income turned to positive from operating loss of JPY 4 billion in the previous quarter, with the increase of JPY 24.9 billion. Over half of it was by the amortization and goodwill of Showa Denko Materials by JPY 13.8 billion, mainly as inventories step-up adjustment of cost of goods sold of JPY 10.9 billion in the previous quarter was one-off transaction. As for price change, +JPY 6.9 billion, despite the spread deterioration of JPY 1.5 billion in Petrochemicals segment, in graphite electrode business of Inorganics segment, despite the slight decline in selling prices, material cost declines such as needle coke resulted in the improvement of JPY 7.1 billion in net. As for graphite electrode, lower of cost or market method, JPY 4.6 billion.
In the second quarter FY 2020, with graphite electrode market price slump, the devaluation of inventory in accordance with the lower of cost or market method was conducted, but with a better inventory turnover with semi-finished goods and materials compared to the previous quarter, a reversal gain was posted. Petrochemicals factors related to JPY 1.3 billion is feedstock adjustment with the naphtha price increase, and others include feedstock adjustment for graphite electrode, -JPY 3.5 billion. As for volumes, -JPY 0.6 billion, despite the volume increase in Showa Denko Materials and Inorganics supported by the demand recovery, volume decreased in Industrial Gases and Chemicals and hard disks in Electronics segment due to seasonality. Please turn to page six. This slide shows a table of sales and operating income by segment, quarter-on-quarter. Sales increased in four segments of Petrochemicals, Aluminum, Showa Denko Materials, and Others.
Profit increased in five segments of Petrochemicals, Chemicals, Inorganics, Aluminum, and Showa Denko Materials. I will elaborate on page seven and onward. Please turn to page seven. Sales in Petrochemicals segment increased JPY 6.9 billion quarter-on-quarter to JPY 57.8 billion, and operating income increased JPY 1.9 billion to JPY 5.5 billion. As for olefins, amid the continued full utilization since July 2020, sales increased with market price rise in major products such as ethylene. Profit increased with the improved feedstock adjustment, along with the naphtha price increase. As for organic chemicals, despite the sales increase due to volume growth in key product vinyl acetate, profit decreased due to material cost increase. SunAllomer sales and profit increased with shipment volume recovery. Sales in Chemicals segment decreased JPY 1.5 billion quarter-on-quarter to JPY 41.3 billion. Operating income increased JPY 0.7 billion to JPY 4.9 billion.
From January to March, business was affected by shutdown maintenance. Semiconductor industry was robust in Electronic Chemicals segment, but seasonal factors such as the Chinese New Year impacted, and the Industrial Gases also, CO2 for beverage, was affected by seasonal factor. Please turn to page eight. Sales in Electronics segment decreased JPY 7 billion quarter-on-quarter to JPY 21.7 billion, and operating income decreased JPY 2.9 billion to JPY 1.4 billion. Hard disk sales and profit decreased due to volume decline, due to the seasonality. Compound semiconductor sales and profit increased due to the absence of lower of cost or market method application, which affected the previous quarter. Lithium-ion battery materials profit was maintained as the previous quarter, but sales slightly decreased due to seasonality. SiC epitaxial wafer sales and profit decreased due to the decreased volume for overseas, despite solid domestic business.
Sales in Inorganics segment decreased JPY 0.4 billion quarter-on-quarter to JPY 21.2 billion, and operating income increased JPY 7.1 billion to JPY 1 billion. Ceramic sales and profit increased due to volume increase for steel and auto industries. Graphite electrode sales decreased due to slight decrease in sales price, despite the maintained volume quarter-on-quarter. Profit increased due to reversal gain on the valuation of inventory in the previous quarter, achieving profitability for the first time in four quarters. Please turn to page nine. Sales in Aluminum segment increased JPY 0.7 billion quarter-on-quarter to JPY 22.5 billion, and operating income increased JPY 1.6 billion to JPY 2.3 billion. Aluminum specialty component sales and profit increased with demand growth for auto parts, machine tools, and OA industries. High-purity foil for capacitor sales and profit increased as the volume increased with the production recovery of demand industries, including auto and FA.
Aluminum can sales decreased due to domestic seasonal volume declines, but profit increased due to cost reduction. Sales in Showa Denko Materials segment increased JPY 1.7 billion quarter-on-quarter to JPY 159.6 billion, and operating income increased JPY 16.7 billion to JPY 7.6 billion. Sales of semiconductor materials and automobile-related products were firm against the backdrop of strong demand for semiconductors and steady recovery in automobile production. Operating income, excluding amortization of goodwill and others, and expenses for step-up of inventories due to its consolidation, is shown with asterisks. As for Other segment, sales of Shoko Co., Ltd. remained at the previous quarter's level, and its profit increased. Building materials profit decreased, and in total, sales increased, but profit decreased. Please turn to page 10. From page 10 to 15, January to March FY 2021 is compared year-on-year with January to March FY 2020 for reference.
Sales and profit of Showa Denko Materials have been included from July 2020, and January to March 2020 does not include Showa Denko Materials segment. Please turn to page 16. Non-operating income and expenses net improved by JPY 3.5 billion year-on-year. Financial expenses for stock acquisition of former Hitachi Chemical, current Showa Denko Materials, increased JPY 2.2 billion, but foreign exchange gains improved by JPY 4.1 billion due to yen's depreciation to 110.7 JPY to a USD as of the end of March. Equity earnings of affiliates improved JPY 1.4 billion, as equity method newly applied to affiliates of Showa Denko Materials. In extraordinary profit and loss, net expenses increased by JPY 11.9 billion. Gain on sales of investment securities increased by JPY 1.1 billion.
As announced on May 10th, JPY 9 billion was posted to cover the cost for environmental construction work, conforming to Soil Contamination Countermeasures Act at Kitakata plant, Fukushima Prefecture. In Showa Denko Materials segment, JPY 2.7 billion as a cost for business structural reform was posted in this quarter. Please turn to page 17. Consolidated balance sheet. As of the end of this first quarter, total assets increased JPY 37.3 billion from the end of the previous fiscal year to JPY 2,240.9 billion. Cash and deposit and intangible fixed assets decreased, but notes and accounts receivable and inventories increased. Total liabilities increased JPY 22.9 billion from the end of the previous fiscal year to JPY 1,508.4 billion. Interest-bearing debt decreased by JPY 3.9 billion, but notes and accounts payable increased.
Total net assets increased JPY 14.4 billion from the end of the previous fiscal year to JPY 732.5 billion. After paying the dividend for the previous year and posting the quarterly net income, retained earnings decreased, but foreign currency translation adjustment increased. Net D/E ratio improved by 0.04 point to 1.80, and equity ratio improved by 0.5 point to 19.0%. Please turn to page 18. Page 18 and 19 show the full year forecast after the revision announced on May 10th. Forecast for the first half from January to June was revised. July to December forecast remains unchanged from February forecast, January to December forecast was recalculated. Sales in the first half was revised up JPY 65 billion to JPY 695 billion, JPY 1,345 billion for the full year.
Operating income was revised up JPY 23 billion in the first half to JPY 34 billion, JPY 68 billion for the full year. In other segment, Shoko Co., Ltd. will be de consolidated from the second quarter due to sell down of our shares upon tender offering, segment sales and profit will decrease. In all the other segments, sales and profit will increase compared to the previous forecast. As for Showa Denko Materials segment, electronics materials and printed wiring board materials backed by the market growth of semiconductor and data center, mobility materials backed by more than expected recovery in automotive production, will increase profit. In Inorganics segment, graphite electrode business shipment volume will exceed the previous forecast, profit will increase.
In Petrochemicals segment, supply-demand improvement in Asia, the deep freeze impact in the U.S., after price rise will improve product market price and the segment profit increase and profit will increase in all segments except Other segment. Please turn to page 20. This slide shows PPA results and amortization of assets pertaining to Showa Denko Materials for reference. Please turn to page 21. Major initiatives implemented or decided in the first quarter are listed. For more details, please refer to financial statements or news release in our website. Finally, as explained so far, the business recovery and improvement progressed faster than expected. With the solid progress of integration work, we have developed into the virtuous cycle.
We would promote the expansion of growth business through realization of integration synergy, as provided in the long-term vision announced in December 2020, promoting the asset shrinkage and the streamlining on the other hand. We would implement initiatives to optimize the business portfolio steadily through work the work. Thank you very much for joining our online conference despite your busy schedule. I sincerely hope analysts and investors to keep your interest in our business management. Thank you for your attention.