Osaka Organic Chemical Industry (4187) Q2 2024 earnings summary

Executive summary

• Net sales rose 7.5% year-over-year to ¥15,338 million in 1H FY11/24, driven by strong chemical product sales and modest growth in electronic materials, while functional chemicals declined.

• Operating profit decreased 4.1% year-over-year to ¥1,859 million due to higher depreciation and amortization from expanded semiconductor materials facilities.

• Ordinary profit fell 4.1% year-over-year to ¥1,988 million.

• Profit attributable to owners of parent increased 25.8% year-over-year to ¥2,020 million, supported by extraordinary gains.

• The company launched a new medium-term management plan, "Progress & Development 2030," focusing on ESG and global market leadership in specialty acrylic acid esters.

Financial highlights

• Gross profit increased to ¥4,316 million from ¥4,032 million year-over-year.

• Basic earnings per share rose to ¥95.44 from ¥74.75 year-over-year.

• Cash and cash equivalents at period end increased to ¥11,995 million from ¥7,022 million a year earlier.

• Net assets rose to ¥44,795 million, with an equity ratio of 77.3%.

• Depreciation and amortization expenses rose significantly following capital investments in 2023.

Outlook and guidance

• Full-year FY11/24 forecast revised to net sales of ¥32 billion (+10.7% YoY), operating profit of ¥4.2 billion (+17.4% YoY), and profit attributable to owners of parent at ¥3.7 billion (+13.1% YoY).

• 1H results achieved 47.9% of full-year sales and 44.3% of operating profit targets.

• Recovery in semiconductor materials expected in 2H FY11/24.

• Dividend forecast for FY11/24 is ¥64 per share, with a 40% payout ratio target.

• No changes to the previously announced consolidated forecast.