Aichi Steel (5482) Q2 2024 earnings summary

Executive summary

• H1 FY2024 revenue rose ¥95億 YoY to ¥1,493億; operating profit increased ¥45億 to ¥47億, supported by price pass-through, favorable slide gap effects and cost reductions.

• Full-year guidance was raised for operating profit to ¥87億 and net income to ¥52億, while revenue guidance was trimmed slightly to ¥3,075億.

Financial highlights

• H1 revenue increased 6.8% YoY; operating profit was ¥47億 versus ¥2億, and profit attributable to owners of the parent was ¥32億 versus ¥2億.

• H1 sales volume declined 2.0% YoY to 494,000 tonnes, as higher sales to automotive-related customers were outweighed by declines in other industries, especially spot sales and exports.

• H1 operating profit benefited from a ¥32億 favorable slide gap; purchase-price effects and inventory impacts were among the main offsets in the profit bridge.

Outlook and guidance

• FY2024 guidance: revenue ¥3,075億, operating profit ¥87億 and net income ¥52億; versus FY2023, increases of ¥224億, ¥55億 and ¥36億, respectively.

• H2 operating profit is forecast at ¥40億, unchanged from prior guidance; H2 slide-gap impact is expected to be a ¥8億 headwind, against a ¥32億 H1 tailwind.

• FY sales volume is forecast at 1.037 million tonnes, up 6% YoY; assumptions include recovery in steel and forging, slower stainless demand recovery, and continued strength in electronic components.