Shikoku Kasei (4099) Q2 2024 earnings summary

Executive summary

• H1 FY2024 net sales and profits reached record highs, driven by overseas Chemicals growth and yen depreciation.

• Full-year FY2024 forecasts were raised for sales, operating profit and net income; the dividend forecast increased to ¥50 per share.

Financial highlights

• H1 net sales were ¥35.225bn, up 14.1% YoY; operating profit ¥4.835bn, up 27.7%; ordinary profit ¥5.936bn, up 25.8%; net income ¥4.032bn, up 25.5%.

• Gross profit rose to ¥13,875m from ¥11,742m; basic EPS increased to ¥85.41 from ¥61.22.

• Foreign-exchange gains were ¥737m, up ¥182m YoY; higher Chemicals sales and yen depreciation more than offset increased transportation and SG&A costs.

• Comprehensive income was ¥5,335m, nearly flat YoY; the equity ratio declined to 61.1% from 65.7% at the previous fiscal year-end.

Outlook and guidance

• FY2024 forecast raised to ¥68.0bn net sales, ¥8.2bn operating profit, ¥9.5bn ordinary profit and ¥7.9bn net income; forecast EPS increased to ¥171.54.

• Revised forecast assumes USD/JPY 150, EUR/JPY 160 and RMB/JPY 20.0; Chemicals overseas sales and FX gains are expected to offset rising input costs.

• Housing Materials forecast cut to ¥19.0bn sales and ¥0.8bn operating profit, reflecting weak housing markets and higher aluminum ingot prices.

• FY2024 dividend forecast is ¥50 per share, with ¥25 interim and ¥25 year-end.