Artience (4634) Q2 2024 earnings summary

Executive summary

• Net sales rose 12.1% year-over-year to ¥172.3 billion in 1H FY2024, with operating profit up 122.1% to ¥10.6 billion and profit attributable to owners of parent up 143.5%.

• All major business segments reported increased sales and income, except the Other segment, which posted a small loss.

• Strategic businesses like CNT dispersions for LiBs faced weak demand in Europe/US but saw production start in China; functional films for smartphones performed well.

• The company revised its full-year forecasts upward, expecting net sales of ¥355.0 billion and profit attributable to owners of parent of ¥16.5 billion.

Financial highlights

• Operating margin improved from 3.1% to 6.1% year-over-year; operating profit for 1H reached ¥10,551 million, up from ¥4,749 million.

• Ordinary profit increased to ¥12,361 million, up 130.5% year-over-year.

• Gross profit margin rose to 21.7% from 18.8% year-over-year.

• EPS (basic) for the first half was ¥176.44, compared to ¥72.50 in the prior year.

• Cash and cash equivalents at period end were ¥59,361 million, up ¥3,320 million from the start of the year.

Outlook and guidance

• FY2024 net sales forecast revised upward to ¥355.0 billion, operating profit to ¥20.0 billion, and profit attributable to owners of parent to ¥16.5 billion.

• Overseas market expansion and gains from shareholding sales expected to support profit growth.

• Risks include global economic trends, raw material and logistics costs, and exchange rate fluctuations.

• Achievement of ¥40.0 billion sales target for CNT dispersions postponed to 2027.

• Interim dividend increased and year-end dividend forecast revised upward.