Mitsubishi Chemical Group (4188) Q1 2025 earnings summary

Executive summary

• Q1 FY2024 sales revenue rose 6.4% year-on-year to ¥1,129.4 billion, with core operating income up 63% to ¥82.6 billion, driven by strong display, semiconductor, and pharma segments, while net income attributable to owners declined 7% due to fewer special items.

• The business environment showed moderate recovery, but uncertainty remains due to high interest rates, a slowing Chinese economy, and geopolitical risks.

• Display and semiconductor-related sales were strong, while automotive and food-related markets were sluggish; Carbon Products continued to post losses.

Financial highlights

• Sales revenue: ¥1,129.4 billion, up 6.4% year-on-year; core operating income: ¥82.6 billion, up 63% year-on-year; net income attributable to owners: ¥39.7 billion, down 7% year-on-year.

• Operating income: ¥85.0 billion, up 22% year-on-year; EBITDA margin improved to 13.4% from 10.8% year-on-year.

• Free cash flow was negative at ¥6.6 billion, with net cash used in investment activities increasing to ¥80.5 billion.

• Net debt increased by ¥80.5 billion; net D/E ratio improved to 1.14 from 1.16 at prior year-end.

• Basic earnings per share was ¥27.87, down from ¥29.91 in the prior year.

Outlook and guidance

• Q1 core operating income reached 75% of the first-half forecast, exceeding expectations; full-year guidance maintained despite uncertainty in display and food-related demand and pending business restructuring impacts.

• FY2024 sales revenue forecast is ¥4,623.0 billion, up 5.4% year-on-year; core operating income forecast at ¥250.0 billion, up 20.1%.

• Net income attributable to owners is projected to decline 56.5% to ¥52.0 billion for FY2024; basic earnings per share forecast is ¥36.55.

• No revisions to previously announced forecasts.