Adeka (4401) Q3 2024 earnings summary

Executive summary

• Q3 FY2023 net sales JPY 286.4b; operating profit JPY 24.0b; current profit JPY 24.5b; profit attributable to owners of parent JPY 16.4b; EPS JPY 161.

• Sales declined, but profit grew; lower sales volume and higher manufacturing and fixed costs were partly offset by net pricing improvements and FX gains.

Financial highlights

• Polymer Additives operating profit was reduced by JPY 1.8b from lower volume and JPY 0.4b from fixed costs; positive pricing and FX effects did not offset the declines.

• Food products operating profit benefited from JPY 3.7b in net pricing, JPY 0.6b from higher volume and JPY 0.4b from lower manufacturing costs.

• Life Science operating profit was pressured by JPY 2.6b from lower volume and JPY 0.6b from higher fixed costs; FX provided a partial offset.

Outlook and guidance

• FY2023 forecasts unchanged: sales JPY 410b; operating and current profit JPY 34.5b each; parent-attributable profit JPY 21b; EPS JPY 204.8.

• Forecast dividends remain JPY 40 per share at year-end and JPY 80 per share annually.

• Segment revisions: lower sales forecasts for Polymer Additives and Electronics & IT Materials; higher food products sales forecast. Electronics & IT Materials operating profit forecast lowered; food products and Other raised.

• Original FY2023 ADX 2023 medium-term plan target is expected to be missed; lessons are intended to inform future targets.