Shikoku Kasei (4099) Q1 2024 earnings summary

Executive summary

• FY2024 1Q net sales rose 18.2% YoY to ¥17,358 million; operating profit was nearly flat at ¥2,405 million as higher sales and yen depreciation were offset by mix and cost pressures.

• Ordinary profit increased 11.2% to ¥2,903 million and profit attributable to owners of parent rose 3.4% to ¥1,803 million, supported by foreign exchange gains.

Financial highlights

• Net sales increased ¥2,672 million YoY; Chemicals gained ¥2,760 million while Housing Materials declined ¥130 million.

• Foreign exchange gains were ¥343 million, up ¥286 million YoY; interest earned was ¥106 million, up ¥47 million.

• Operating profit was essentially unchanged YoY; foreign exchange fluctuations contributed an estimated ¥450 million to profit, while freight, labor and other SG&A costs weighed on results.

Outlook and guidance

• FY2024 forecasts unchanged: net sales ¥64,000 million, operating profit ¥7,800 million, ordinary profit ¥8,200 million and net income ¥5,500 million.

• Chemicals sales are expected to grow on insoluble sulfur expansion and fine-chemical market recovery; segment operating profit is forecast at ¥6,300 million amid lower unit prices and higher plant repair costs.

• Housing Materials sales are expected to recover, while operating profit is forecast at ¥1,300 million due to fixed costs from sales-promotion initiatives.

• FY2024 1Q progress was 27% of planned sales, 31% of operating profit, 35% of ordinary profit and 33% of net income; results were slightly ahead of plan.

• FY2023 foreign exchange gains of ¥549 million and an investment-security sale gain of ¥2,088 million are not expected to recur; each ¥1 move against the US dollar affects sales by ~¥180 million and operating profit by ~¥70 million.