Sekisui Chemical (4204) Q4 2024 earnings summary

Executive summary

• FY2023 record net sales of ¥1,256,538mn, operating profit of ¥94,399mn and net income attributable to owners of ¥77,930mn; ordinary profit was ¥105,921mn.

• Higher value-added sales, cost control and FX supported operating profit; FX gains and securities-sale gains boosted ordinary profit and net income amid weak housing and semiconductor markets.

Financial highlights

• Gross profit rose to ¥392.2bn from ¥377.2bn, and gross margin improved to 31.2% from 30.4%.

• FY2023 EBITDA reached a record ¥147.1bn, up ¥5.0bn; capital expenditures were ¥60.6bn and R&D expenditure ¥41.7bn.

• Cash from operations was ¥106,632mn; investing and financing cash outflows were ¥18,515mn and ¥53,023mn, respectively.

Outlook and guidance

• FY2024 guidance: net sales ¥1,326.7bn (+5.6%), operating profit ¥102.0bn (+8.1%), ordinary profit ¥102.5bn (-3.2%) and net income attributable to owners ¥78.0bn (+0.1%).

• Planned growth investments include perovskite solar cells, biorefineries, DX, R&D and human capital; priorities include high-value-added products, margin preservation and Housing reforms.

• FY2024 EBITDA is planned at ¥159.0bn, capital expenditures at ¥75.0bn and R&D expenditure at ¥45.0bn; exchange-rate assumptions are ¥150/$ and ¥161/€.

• A ¥1 depreciation against the dollar is estimated to raise annual operating profit by ~¥500mn.