Toho Zinc Co (5707) investor relations material

Executive summary

• First half FY2025 sales were ¥53.8 billion, with an operating loss of ¥672 million, ordinary loss of ¥1,182 million, and net loss of ¥1.4 billion, underperforming expectations due to operational issues in lead smelting.

• Profit attributable to owners of parent was a loss of ¥1,354 million, reversing a profit of ¥4,208 million in the same period last year.

• Comprehensive income was negative ¥4,728 million, down from positive ¥4,029 million year-over-year.

• Q2 standalone saw positive EBITDA, reflecting an improving trend from Q1, driven by reduced residual costs in zinc smelting and favorable market conditions.

• The company is executing a comprehensive revitalization plan, including restructuring, cost reductions, and organizational reforms.

Financial highlights

• Revenue for H1 FY2025 was ¥53.8 billion, down year-over-year due to business withdrawals and reorganizations, but core and growth segments saw increases.

• Gross profit fell to ¥2,333 million from ¥7,580 million year-over-year.

• EBITDA and net income declined year-over-year, impacted by market conditions and costs related to zinc smelting completion.

• Q2 revenue was ¥27.0 billion, EBITDA ¥0.5 billion, and net loss ¥0.2 billion.

• Basic earnings per share dropped to ¥(45.86) from ¥309.92 year-over-year.

Outlook and guidance

• Full-year FY2025 forecast revised downward to net sales of ¥118,400 million, EBITDA of ¥4.1 billion, and net income of ¥1.3 billion due to operational issues and higher raw material costs.

• Operating profit forecast is ¥2,600 million, ordinary profit ¥1,800 million, and basic earnings per share projected at ¥44.02.

• Second half expected to show significant profit improvement as residual zinc costs subside and market prices rise.

• FY2026 is projected to meet or exceed the original revitalization plan as one-off costs are eliminated and revenue improvements accumulate.

• The company revised its financial results forecasts.