Sumco (3436) Q4 2024 earnings summary

Executive summary

• FY2024 net sales declined to JPY 396.6 billion, down 6.9% year-on-year, with operating income at JPY 36.9 billion, both impacted by weak small-diameter wafer demand and extraordinary losses of JPY 5.8 billion from Miyazaki Plant restructuring.

• Q4 FY2024 results exceeded forecasts by JPY 2 billion, driven by strong leading-edge wafer sales at high price points, with Q4 net sales at JPY 100.0 billion and operating profit at JPY 7.0 billion.

• Demand for 300mm wafers is gradually recovering, especially for AI/data center applications, while 200mm and smaller wafers remain sluggish due to competition and weak end markets.

• Focus is shifting to advanced 300mm products and production consolidation to improve efficiency and profitability.

Financial highlights

• FY2024 EBITDA was JPY 114.0 billion (margin 28.8%), operating margin 9.3%, and ROE 3.4%, all declining year-on-year.

• Net profit attributable to owners was JPY 19.8 billion, down 68.9% year-on-year.

• CapEx was JPY 214.9 billion, down from JPY 315.4 billion in FY2023.

• Free cash flow was negative JPY 178 billion, covered by increased interest-bearing debt.

• Basic EPS for FY2024 was JPY 56.84, a decrease of JPY 125.75 year-on-year.

Outlook and guidance

• Q1 FY2025 guidance: net sales JPY 102 billion, operating income JPY 4.5 billion, net profit JPY 1.5 billion, with operating margin expected to decline to 4.4%.

• Sales expected to rise JPY 2 billion quarter-on-quarter, but operating income to fall JPY 2.5 billion due to higher depreciation and costs.

• Depreciation expenses projected to increase, but full-year depreciation likely several tens of billions of yen lower than last year's JPY 150 billion.

• Company will focus on modernizing equipment, strengthening 300mm wafer supply, and reorganizing small-diameter wafer production.

• Yen depreciation expected to impact operating profit; 1 yen appreciation reduces profit by JPY 1.2 billion annually.