Sumco (3436) Q3 2024 earnings summary

Executive summary

• Q3 FY2024 operating profit slightly exceeded forecasts due to lower costs and delayed depreciation, while net sales reached ¥98.4B, slightly below forecast; profit attributable to owners was ¥3.6B, marginally above forecast.

• 300mm wafer shipments are recovering, driven by AI and data center demand, while 200mm and smaller wafer shipments remain weak, especially for automotive and consumer applications.

• China’s increased domestic wafer production and global economic conditions are clouding market visibility and impacting legacy application recovery.

• The company is focusing on technology development, productivity improvements, and cost rationalization to maintain competitiveness.

Financial highlights

• Q3 FY2024 sales: ¥98.4B; operating profit: ¥9.1B; ordinary profit: ¥5.6B; net profit: ¥3.6B.

• Nine-month sales: ¥296.6B; operating profit: ¥29.9B; ordinary profit: ¥26B; net profit: ¥16.2B.

• Year-over-year, nine-month sales fell ¥24.2B and operating profit dropped ¥31.9B; basic EPS for nine months was ¥46.50, down from ¥168.42.

• Q3 operating income fell ¥3.1B sequentially, mainly due to increased depreciation and negative forex impact.

• EBITDA for nine months was ¥84.8B, down ¥26.9B year-over-year; operating margin for nine months was 10.1%, down from 19.3%.

Outlook and guidance

• Q4 FY2024 forecast: sales ¥97B, operating profit ¥5B, ordinary profit ¥7B, net profit ¥4B.

• Full-year guidance: sales ¥393.6B, operating profit ¥34.9B, ordinary profit ¥33B, net profit ¥20.2B; basic EPS forecast at ¥57.93.

• Annual dividend per share guided at ¥21, with a payout ratio of 38.9%.

• Depreciation expected to increase to ¥23B in Q4 and ¥79B for the full year.

• Recovery in demand for 300mm wafers is expected to be gradual, with ongoing weak demand for smaller wafers and end products.