Sumco (3436) Q2 2024 earnings summary

Executive summary

• Q2 FY2024 net sales reached ¥104.7 billion, exceeding forecasts by up to ¥5.7 billion, with operating profit at ¥12.2 billion, and profit attributable to owners of parent at ¥7.6 billion; however, first half net sales and profits declined sharply year-on-year.

• Market recovery was led by 300mm wafers for AI/data center applications, while legacy and 200mm segments remained weak.

• Management expects a gradual, not sharp, recovery in overall wafer demand, with 2025 projected as a tough year and full utilization of new capacity anticipated in 2026.

Financial highlights

• Q2 sales: ¥104.7 billion; operating profit: ¥12.2 billion; net profit: ¥7.6 billion; interim dividend of ¥15 per share announced.

• First half sales: ¥198.2 billion, down ¥22.4 billion year-on-year; OP down ¥25.9 billion; net profit down ¥37 billion due to absence of prior year’s extraordinary gain.

• EBITDA for 1H FY2024 was ¥55.8 billion, down ¥21.7 billion year-on-year; basic EPS for 1H was ¥36.07, a decrease of ¥105.75 year-on-year.

• Negative free cash flow of ¥114.2 billion in first half due to heavy CapEx of ¥124.7 billion.

Outlook and guidance

• Q3 FY2024 forecast: sales ¥100 billion, OP ¥7 billion, net profit ¥3.5 billion; sequential declines mainly due to stronger yen and higher depreciation.

• Nine-month OP expected to decline ¥34 billion year-on-year, with depreciation and sales-related variance as main negatives.

• Gradual recovery in 300mm expected, led by AI/data center demand; 200mm volumes to remain weak.

• Price increases from LTAs delayed to 2025–2026 due to deferred deliveries.

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