Sumco (3436) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 FY2025 rose to ¥102.4B, up ¥8.9B year-over-year and ¥2.4B sequentially, but operating profit declined to ¥5.9B, down ¥2.7B year-over-year and ¥1.1B sequentially.

• Profit attributable to owners of parent was ¥3.0B, a decrease of ¥2.0B year-over-year.

• EBITDA margin stood at 28.0%, nearly flat year-over-year.

• Demand for 300mm wafers for AI/data center use remained strong, but overall recovery was moderate due to slow inventory drawdown and weak demand for other applications.

• Business reforms included reorganizing production for smaller wafers and boosting productivity with AI.

Financial highlights

• Net sales: ¥102.4B (up ¥8.9B YoY, up ¥2.4B QoQ); operating profit: ¥5.9B (down ¥2.7B YoY, down ¥1.1B QoQ); ordinary profit: ¥4.8B (down ¥4.3B YoY, down ¥6.6B QoQ).

• EBITDA: ¥28.6B (up ¥2.5B YoY, down ¥0.6B QoQ); basic EPS: ¥8.71 (down ¥5.75 YoY, down ¥1.63 QoQ).

• Gross margin decreased as cost of sales increased faster than sales; gross profit was ¥19,010 million.

• Comprehensive income turned negative at ¥(6,764) million, compared to ¥14,104 million last year.

• CapEx for Q1 FY2025 was ¥32.7B, down ¥14B from Q4 and ¥43.5B YoY; depreciation was ¥22.7B, largely unchanged QoQ.

Outlook and guidance

• Q2 FY2025 forecast: net sales of ¥100.0B, operating profit of zero, ordinary loss of ¥1.0B, and net loss of ¥2.0B.

• Depreciation in Q2 expected to rise to ¥27.5B, with a stronger Yen assumed at ¥145 to the dollar.

• Interim dividend guidance set at ¥10, with year-end dividend undetermined.

• Demand for leading-edge 300mm wafers is expected to stay strong, but recovery for other products will be slow.

• Second half shipment volumes for 300mm wafers expected to be flat half-on-half, with memory market volatility as a key risk.