AGC (5201) Q2 2024 earnings summary

Executive summary

• Net sales for 1H 2024 rose to ¥1,015.2B, up 3.0% year-over-year, driven by FX gains and strong Electronics sales, despite declines in Architectural Glass, Chemicals, and Life Science segments.

• Operating profit fell to ¥56.7B, down 11.9% year-over-year, mainly due to lower sales prices and Life Science underperformance, despite lower raw material and fuel costs.

• Net loss attributable to owners was ¥-114.5B, impacted by ¥118.3B impairment losses in Life Science and ¥36.0B losses from the Russian business transfer.

Financial highlights

• Net sales: ¥1,015.2B (+¥29.9B YoY); operating profit: ¥56.7B (−¥7.6B YoY); net loss: ¥-114.5B (−¥155.1B YoY).

• Operating profit margin decreased to 5.6% from 6.5% YoY.

• Free cash flow improved to ¥64.0B from ¥1.3B YoY; cash and equivalents decreased to ¥108.9B from ¥146.1B at year-end 2023.

• D/E ratio improved to 0.38 from 0.42 at year-end 2023.

• Basic EPS dropped to ¥(540.26) from ¥185.21 YoY.

Outlook and guidance

• FY2024 net sales forecast revised to ¥2,100.0B (+¥80.7B YoY); operating profit forecast cut to ¥130.0B (−¥20.0B from previous), mainly due to Life Science shortfall.

• Net loss for FY2024 expected at ¥-95.0B, reflecting impairment and business transfer losses; basic EPS forecast at ¥(448.23).

• Interim and year-end dividends maintained at ¥105/share each; total dividend forecast at ¥210/share.

• Electronics segment outlook raised on strong semiconductor-related demand; Life Science outlook further reduced due to project delays and cost overruns.