Asahi Kasei (3407) Q4 2024 earnings summary

Executive summary

• FY2023 net sales rose 2.1% to ¥2,784.9bn and operating income increased 10.2% to ¥140.7bn; Homes and Health Care grew while Material faced weak demand and pricing pressure.

• Net income attributable to owners recovered to ¥43.8bn from a ¥91.9bn loss; impairment and affiliate losses contributed to net income missing the February forecast.

• Operating income exceeded the February forecast in every segment.

Financial highlights

• Gross profit increased to ¥816.0bn from ¥773.8bn; operating margin improved to 5.1% from 4.7%.

• EBITDA was ¥322.9bn, up 5.9%; EBITDA margin rose to 11.6% from 11.2%.

• Ordinary income fell 25.5% to ¥90.1bn, including ¥38.1bn in equity losses of affiliates.

• Operating cash flow was ¥295.3bn; free cash flow was ¥152.7bn, versus negative ¥122.8bn in FY2022.

• Comprehensive income rose to ¥206.2bn from ¥25.2bn, including a ¥151.8bn positive foreign currency translation adjustment.

Outlook and guidance

• FY2024 forecast: net sales ¥2,912.0bn (+4.6%), operating income ¥180.0bn (+27.9%), ordinary income ¥181.0bn (+100.8%) and net income attributable to owners ¥100.0bn (+128.3%).

• FY2024 EBITDA forecast is ¥356.0bn, up 10.2%; EPS forecast is ¥72.14.

• Full-year dividend forecast remains ¥36 per share.

• Operating income growth is forecast across all segments, supported by gradual automotive, electronics and semiconductor recovery and continued growth in Homes and Health Care.