Sekisui Chemical (4204) Q1 2025 earnings summary

Executive summary

• Q1 net sales reached ¥298.8 billion, up 4.7% year-over-year, with operating profit at ¥20.2 billion, up 32.1%, and ordinary profit at ¥26.5 billion; profit attributable to owners of parent was ¥23.7 billion, slightly down due to lower gains on investment securities.

• All major segments except Housing saw increases in both net sales and operating profit; Housing segment improved profitability despite lower sales.

• Record first-quarter operating and ordinary profits were achieved, driven by high value-added products, cost controls, and positive foreign exchange effects.

Financial highlights

• Gross profit margin improved to 32.2% from 30.7% year-over-year; EBITDA for Q1 was ¥33.3 billion, up ¥5.5 billion.

• Interim dividend per share to increase by ¥2 to ¥37; full-year dividend forecast at ¥75 per share.

• Cash and deposits decreased by ¥31.2 billion to ¥107.4 billion; free cash flow for Q1 was negative at -¥17.7 billion.

Outlook and guidance

• First-half FY2024 forecasts revised upward: net sales to ¥635.7 billion, operating profit to ¥44.8 billion, and profit attributable to owners of parent to ¥39.5 billion.

• Full-year forecast maintained due to FX fluctuation risk: net sales ¥1,326.7 billion, operating profit ¥102.0 billion, and annual dividend of ¥75 per share.

• Second quarter operating profit expected to slightly decline compared to plan and previous year due to raw material price impacts.