KH Neochem (4189) Q4 2024 earnings summary

Executive summary

• Net sales for FY2024 reached 119.8 billion yen, up 3.9% year-over-year, with operating income at 12.2 billion yen, a 22.6% increase, and net income attributable to owners up 22.5% to 8.4 billion yen.

• Performance Materials and Electronic Materials segments drove profit growth, while Basic Chemicals underwent structural reform, including discontinuation of certain solvents.

• Comprehensive income increased 14.0% year-over-year to 8.9 billion yen.

• Basic earnings per share for FY2024 was 225.81 yen, up from 184.23 yen in FY2023.

• Growth investments continued, notably with the expansion of refrigeration lubricant raw materials capacity.

Financial highlights

• Net sales: 119.8 billion yen (+4% YoY); Operating income: 12.2 billion yen (+23% YoY); EBITDA: 17.2 billion yen (+18% YoY).

• Profit attributable to owners: 8.4 billion yen (+22% YoY); Ordinary income: 12.1 billion yen (+24% YoY).

• Operating income exceeded forecasts by 3%.

• Cash flows from operating activities decreased to 7.0 billion yen from 13.2 billion yen in the prior year.

• Cash and cash equivalents at year-end were 7.2 billion yen, down from 9.7 billion yen.

Outlook and guidance

• FY2025 net sales forecasted at 127.4 billion yen (+6.4% YoY), operating income at 14.0 billion yen (+14.8% YoY), and EBITDA at 20.5 billion yen (+19% YoY).

• Profit attributable to owners projected at 10.0 billion yen (+20% YoY); basic earnings per share forecasted at 270.17 yen.

• No large-scale turnaround maintenance planned; focus on leveraging strong demand in air conditioners and semiconductors.

• Full-scale operation of CO2-capture and predictive diagnostic systems to enhance production stability.