Nippon Shokubai (4114) Q2 2025 earnings summary

Executive summary

• Revenue and operating profit increased year-over-year in 1H FY2024, with revenue at ¥206.9B (+6.5% YoY), operating profit at ¥10.5B (+4.5% YoY), and profit attributable to owners at ¥8.9B (+30.1% YoY), driven by higher volumes in specialty chemicals, electronics materials, and AA/AES products, as well as improved equity method investment results.

• Full-year FY2024 forecasts were revised upward, expecting revenue of ¥415.0B (+5.9% YoY), operating profit of ¥20.0B (+20.8% YoY), and profit attributable to owners of ¥16.5B (+49.9% YoY), supported by demand recovery and increased SAP volumes.

• Shareholder returns were enhanced with a significant dividend increase, a 4-for-1 stock split effective April 1, 2024, and a completed share buyback.

• Basic earnings per share increased to ¥58.03 in 1H FY2024, with a full-year projection of ¥108.05.

• Total assets decreased to ¥522.7B, mainly due to lower sales volume and trade receivables.

Financial highlights

• 1H FY2024 revenue was ¥206.9B (+6.5% YoY), operating profit ¥10.5B (+4.5% YoY), and profit attributable to owners ¥8.9B (+30.1% YoY).

• Gross profit increased to ¥36.3B from ¥33.8B YoY.

• Profit before tax rose 27.0% YoY to ¥12.4B.

• Comprehensive income dropped to ¥6.5B from ¥22.3B YoY, mainly due to negative exchange differences.

• Full-year FY2024 revenue forecast is ¥415.0B (+5.9% YoY), operating profit ¥20.0B (+20.8% YoY), and profit attributable to owners ¥16.5B (+49.9% YoY).

Outlook and guidance

• Demand recovery for specialty chemicals, electronics materials, and SAP is expected to continue, supporting higher sales and profits.

• Dividend per share is forecast to double YoY post-split, with interim and year-end dividends at ¥54 each, totaling ¥108 for the year.

• Second-half forecasts assume an exchange rate of 145 yen/USD, 160 yen/EUR, and a domestic naphtha price of ¥73,000/kl.

• The company targets a dividend payout ratio of 100% or DOE of 2.0%, with further buybacks planned through FY2027.