Shikoku Kasei (4099) Q3 2023 earnings summary

Executive summary

• Jan–Sep revenue rose 1.3% YoY, while operating and ordinary profit declined; higher costs outweighed sales growth, and net profit increased on investment-security gains.

• Full-year forecast remained unchanged, with 3Q progress slightly ahead of expectations overall; Housing Materials demand remained sluggish.

Financial highlights

• Jan–Sep net sales were ¥46,789 million, up ¥583 million YoY; operating profit was ¥6,129 million, down ¥483 million, and ordinary profit was ¥7,413 million, down ¥636 million.

• Profit attributable to owners of parent was ¥6,520 million, up ¥728 million or 12.6% YoY; FX gains were ¥769 million, down ¥306 million YoY.

• Net sales rose in Chemicals and Housing Materials, but operating profit fell in both segments as margins weakened.

Outlook and guidance

• FY2023 forecasts remained unchanged: net sales ¥63,000 million, operating profit ¥7,500 million, ordinary profit ¥8,300 million, and parent-attributable profit ¥6,800 million.

• 3Q progress: sales 74%, operating profit 81%, ordinary profit 89%, and parent-attributable profit 95% of full-year forecasts.

• Chemicals export growth to North America is expected to continue, offsetting weaker markets elsewhere; Housing Materials revenue is expected to benefit from two price increases.

• Forecast operating profit reflects lower Glicoat-SMD sales and weaker insoluble-sulfur profitability in Chemicals, and lower interior/exterior finishes profitability in Housing Materials.