Sumco (3436) Q2 2024 earnings summary

Executive summary

• Q2 FY2024 net sales reached JPY 104.7 billion, exceeding forecasts by JPY 5.7 billion, with operating profit at JPY 12.2 billion, up JPY 3.2 billion from forecast.

• First half FY2024 net sales were JPY 198.2 billion, down JPY 22.4 billion year-over-year, and operating profit was JPY 20.8 billion, down JPY 25.9 billion year-over-year.

• Profit attributable to owners of parent for the first half was JPY 12.6 billion, down 74.6% year-over-year.

• 300mm wafer shipments for logic and memory began recovering after bottoming in Q1, driven by AI and data center demand, while 200mm and smaller wafer shipments remained weak.

• AI-related demand, especially for generative AI and data centers, is the primary growth driver, but overall wafer demand recovery is expected to be gradual through the end of 2024.

Financial highlights

• Q2 FY2024 net sales: JPY 104.7 billion; operating profit: JPY 12.2 billion; net profit: JPY 7.6 billion.

• First half EBITDA was JPY 55.8 billion, down JPY 21.7 billion year-over-year; EBITDA margin was 28.2%.

• Basic EPS for first half was JPY 36.07, down from JPY 141.82 year-over-year.

• Extraordinary gains from the prior year (JPY 20.1 billion) were absent, impacting year-on-year profit comparisons.

• Q2 sales rose JPY 11.2 billion sequentially, with OP up JPY 2.6 billion, aided by a weaker yen and modest 300mm volume recovery.

Outlook and guidance

• Q3 FY2024 sales are forecast at JPY 100 billion, OP at JPY 7 billion, and net profit at JPY 3.5 billion.

• Full 9-month FY2024 forecast: net sales JPY 298.2 billion, operating profit JPY 27.8 billion, net profit JPY 16.1 billion, all down year-over-year.

• Sequential declines in sales and OP for Q3 are mainly due to a stronger yen and increased depreciation from greenfield investments.

• No sharp recovery is expected in the second half; overall market recovery is projected to be gradual, with 2025 likely to be a tough year and a more robust recovery anticipated in 2026.

• Full-year guidance remains undetermined due to market volatility.