Resonac (4004) Q2 2024 earnings summary

Executive summary

• Sales and income improved in 1H 2024 compared to 1H 2023, with all major segments except Chemicals showing growth.

• Net sales rose 8.5% year-over-year to ¥668.5B, with operating income swinging from a ¥13.2B loss to a ¥28.0B profit.

• Net income attributable to owners improved from a ¥19.8B loss to a ¥38.4B profit, aided by gains on asset sales.

• Full-year 2024 forecast revised upward, expecting higher sales and income versus 2023.

• Semiconductor and Electronic Materials led growth, while Chemicals segment saw declines due to lower graphite electrode sales.

Financial highlights

• 1H 2024 net sales ¥668.5B, up ¥52.4B year-over-year; operating income ¥28.0B, up ¥41.1B; net income ¥38.4B, up ¥57.1B.

• EBITDA for 1H 2024 was ¥83.8B (12.5% margin), up from ¥41.0B (6.7%) in 1H 2023.

• Free cash flow in 1H 2024 was ¥42.2B, up from ¥2.9B in 1H 2023, driven by higher operating cash flow and asset sales.

• Gross profit increased to ¥151.4B from ¥110.3B year-over-year.

• Extraordinary profit of ¥17.6B in 1H 2024, mainly from gain on sale of noncurrent assets.

Outlook and guidance

• 2024 full-year net sales forecast raised to ¥1,392.0B, operating income to ¥61.0B, and net income to ¥35.0B.

• EBITDA expected at ¥171.3B (12.3% margin); ROIC forecast at 3.0%.

• Net income per share forecast at ¥190.86; dividend maintained at ¥65 per share.

• Semiconductor and Electronic Materials segment expected to drive most of the growth, with operating income forecast at ¥50.0B.

• Capital expenditures for 2024 projected at ¥122.4B, up ¥25.8B year-over-year.