Toho Zinc Co (5707) Q2 2027 earnings summary

Executive summary

• H1 net sales rose 23.4% YoY to ¥66,448 million; operating, ordinary and parent-attributable profit returned to positive territory.

• Full-year guidance was cut as higher work in process (WIP), worsening raw-material sourcing and weaker metal prices delayed precious-metal production and sales.

• The revitalization plan remains focused on stronger recycling, stable operations and structural transformation for medium- and long-term growth.

Financial highlights

• H1 net sales were ¥66,448 million versus ¥53,832 million; operating profit was ¥906 million versus an operating loss of ¥672 million.

• Ordinary profit was ¥432 million versus a loss of ¥1,182 million; parent-attributable profit was ¥515 million versus a loss of ¥1,354 million.

• H1 EBITDA was ¥1.67 billion versus ¥20 million; gross profit rose to ¥3,550 million from ¥2,333 million, while SG&A declined to ¥2,644 million from ¥3,005 million.

• Comprehensive income was ¥2,586 million versus a loss of ¥4,728 million, including ¥2,125 million of hedge gains in other comprehensive income.

• Standalone Q2 EBITDA was ¥1.6 billion, with quarterly profit supported by improvements in Smelting and Refining and steady Environment and Recycling performance.

Outlook and guidance

• Revised full-year forecast: net sales ¥131.0 billion, operating profit ¥3.3 billion, EBITDA ¥4.6 billion, ordinary profit ¥1.6 billion and parent-attributable profit ¥800 million.

• Cuts from prior guidance were ¥47.5 billion for revenue, ¥3.4 billion for EBITDA, ¥2.9 billion for ordinary income and ¥2.7 billion for net income.

• Forecast assumptions include lead at $1,903/t, silver at $62/toz for the full year ($55/toz in 2H), and USD/JPY at ¥160.

• Higher WIP is expected to delay profit realization primarily into the next fiscal year; smelter-refinery collaboration aims to reduce WIP and shorten manufacturing lead times.

• Numerical targets from FY2027 onward under the revitalization plan are under review to reflect changes in the external environment.