KH Neochem (4189) Q3 2024 earnings summary

Executive summary

• Net sales for the first nine months of 2024 reached ¥86.8 billion, up 2% year-over-year, with operating income at ¥7.3 billion, a 7% increase year-over-year.

• Net income attributable to owners of parent rose 5.5% year-over-year to ¥4,922 million.

• Growth in Performance Materials and Electronic Materials offset declines in Basic Chemicals, despite increased expenses from large-scale maintenance.

• Capacity expansion for refrigeration lubricant raw materials completed to meet medium- to long-term demand and environmental regulations.

Financial highlights

• Net sales rose by ¥1.3 billion (+2% YoY) and operating income by ¥0.5 billion (+7% YoY).

• EBITDA increased 7% year-over-year to ¥11.0 billion; profit attributable to owners of parent rose 5% to ¥4.9 billion.

• Ordinary income for the nine-month period was ¥7,182 million, a 5.9% increase year-over-year.

• Basic earnings per share for the nine months was ¥132.92, up from ¥125.92 in the prior year.

• Equity ratio improved to 52.9% as of September 30, 2024, from 51.2% at the end of 2023.

Outlook and guidance

• Progress toward full-year forecast: 72% for net sales, 62% for operating income, and 59% for profit attributable to owners of parent.

• Full-year 2024 net sales are forecast at ¥121,100 million, a 5.1% increase from the previous year.

• Operating income is projected to reach ¥11,800 million, up 18.6% year-over-year.

• Net income attributable to owners of parent is expected to be ¥8,400 million, a 23.1% increase.

• Annual dividend forecast remains unchanged at ¥90.00 per share.