Shikoku Kasei (4099) Q4 2023 earnings summary

Executive summary

• FY2023 sales rose 2.7% YoY to ¥63,117 million, while operating profit fell 7.9% to ¥8,019 million; profit attributable to owners of parent increased 10.9% to ¥7,853 million.

• Chemicals benefited from second-half recovery and yen depreciation; Housing Materials weakened amid deteriorating housing-market conditions.

Financial highlights

• FY2023 net sales were ¥63,117 million, up ¥1,642 million YoY; operating profit was ¥8,019 million, down ¥684 million, and ordinary profit was ¥9,280 million, down ¥560 million.

• Profit attributable to owners of parent rose ¥772 million YoY to ¥7,853 million, supported by a ¥2,071 million gain on investment-security sales.

• Operating profit declined as raw-material, labor and depreciation costs increased; sales growth, weaker yen and normalized export logistics costs partly offset pressure.

Outlook and guidance

• FY2024 forecast: net sales ¥64,000 million, up 1.4%; operating profit ¥7,800 million, down 2.7%; ordinary profit ¥8,200 million, down 11.6%; net income ¥5,500 million, down 30.0%.

• Chemicals sales are forecast to increase on insoluble-sulfur expansion and fine-chemicals recovery; operating profit is expected to remain stable amid lower unit prices and higher plant-repair costs.

• Housing Materials sales are expected to recover with the housing market, while operating profit is forecast to decline due to fixed costs from sales-promotion initiatives.

• Forecast FX assumptions: $1=¥140, €1=¥150 and RMB1=¥19.0; a ¥1 move against the US dollar is estimated to affect sales by ~¥180 million and operating profit by ~¥70 million.