Dowa Holdings (5714) Q2 2025 earnings summary

Executive summary

• H1 FY2024 net sales declined 4.9% year-over-year to ¥352.6B, but operating income rose 51% to ¥21.5B and net profit attributable to owners increased 56% to ¥20.5B.

• Stronger yen and higher metal prices contributed to profit growth, offsetting lower sales in some segments.

• Comprehensive income reached ¥27.2B, up slightly from ¥26.8B a year earlier.

• Environmental Management & Recycling and Metal Processing segments saw notable operating income increases.

• Operating profit rose 50.5% to ¥21.5B, and ordinary profit increased 23.7% to ¥27.0B year-over-year.

Financial highlights

• H1 FY2024 operating income up ¥7.2B (51%) year-over-year; ordinary income up ¥5.1B (24%).

• Gross profit increased to ¥48.1B from ¥38.9B year-over-year.

• Cash flow from operating activities dropped sharply to -¥3.1B from ¥93.1B in H1 FY2023, mainly due to inventory build-up.

• Total assets increased by ¥31.6B to ¥664.4B, driven by higher inventories and capital investment.

• Basic earnings per share rose to ¥344.65 from ¥221.52 year-over-year.

Outlook and guidance

• FY2024 full-year net sales forecast revised down to ¥700.0B (2.4% below FY2023), but operating income raised to ¥32.0B (up 7%).

• Net profit forecast for FY2024 increased to ¥30.0B, up 8% year-over-year, with basic EPS of ¥503.86.

• Dividend forecast maintained at ¥130 per share.

• H2 expected to see lower demand for automobile and new energy-related products, but higher metal prices and a weaker yen should support profits.