Nippon Chemical Industrial (4092) investor relations material

Executive summary

• Net sales rose 3.4% year-over-year to ¥40.2 billion, driven by higher sales in electronic ceramic materials, especially for automotive and communication applications.

• Operating profit declined 27.7% year-over-year to ¥2.4 billion due to the absence of prior year inventory valuation gains and one-off expenses from production site consolidation.

• Profit attributable to owners of parent increased 13.1% year-over-year to ¥2.89 billion, with EPS rising to ¥331.39.

• Comprehensive income surged 124.5% year-over-year to ¥5.07 billion, driven by gains in other comprehensive income.

• The medium-term business plan targets are expected to be missed due to slower-than-expected demand growth and higher upfront investment costs.

Financial highlights

• Net sales: ¥40.2 billion (+3.4% YoY); Operating profit: ¥2.4 billion (−27.7% YoY); Ordinary profit: ¥2.38 billion (−25.8% YoY); EBITDA: ¥6.16 billion (−11.1% YoY).

• ROE improved to 6.0% (+0.4pt YoY); equity ratio increased to 64.1%.

• Free cash flow was ¥1.09 billion, up ¥508 million year-over-year.

• Capital expenditures were ¥4.39 billion (−11.7% YoY); R&D expenses were ¥1.58 billion (−1.1% YoY).

• Net assets per share increased to ¥5,799.58 from ¥5,311.05.

Outlook and guidance

• FY2027 forecast: Net sales ¥40.8 billion (+1.5% YoY), operating profit ¥2.8 billion (+15.9% YoY), profit ¥3.0 billion (+3.7% YoY), EBITDA ¥7.0 billion (+13.7% YoY).

• Growth expected from increased sales in MLCC and semiconductor markets, price revisions, and operational efficiency improvements.

• Annual dividend per share is forecast to increase to ¥120.00, with a payout ratio of 36.2%.

• Interim dividend planned at ¥60/share; year-end dividend to be determined.