Toho Zinc Co (5707) Q3 2026 earnings summary

Executive summary

• FY2025 9M net sales reached ¥90.1bn, with profit attributable to owners of parent at ¥1.7bn, reversing a prior-year loss; 3Q net sales were ¥36.3bn, and profit ¥3.1bn, outperforming expectations due to favorable FX and resource markets.

• Operating profit for 9M declined 50.4% YoY to ¥2,913 million, while comprehensive income was negative ¥7,401 million due to large deferred hedge losses.

• Smelting and Refining saw improved net sales from high silver prices; Metal Recycling losses declined as planned, with asset sales offsetting losses.

• Transformation initiatives and asset sales supported earnings, and full-year forecasts were revised upward based on strong 9M progress.

• Extraordinary losses of ¥8,402 million were recorded, mainly from impairment losses, while extraordinary income of ¥192 million was recognized from asset sales.

Financial highlights

• FY2025 9M net sales fell YoY due to business reorganization and withdrawal from zinc smelting, but profit increased YoY due to absence of prior-year impairment losses.

• 9M EBITDA declined YoY, reflecting lower net sales and weaker lead/silver smelting earnings from unfavorable TC/RC terms.

• Quarterly EBITDA improved in 3Q due to productivity gains, higher silver prices, and asset sales; 2Q and 3Q profits were impacted by a fire at Onahama Smelter.

• Silver prices reached historic highs, averaging USD92/oz in January 2026, peaking at USD118.45/oz.

• Gross profit for the nine months was ¥7,496 million, down from ¥11,964 million YoY; ordinary profit dropped 51.0% to ¥2,106 million.

Outlook and guidance

• FY2025 full-year forecast revised to ¥123.0bn net sales, ¥6.1bn EBITDA, and ¥2.7bn profit, up from previous forecasts; operating profit projected at ¥4,800 million, and profit attributable to owners of parent at ¥3,500 million.

• Basic earnings per share for the full year is expected to be ¥91.42.

• FY2026 and beyond plans are under review, with expectations for full-year contributions from transformation initiatives and increased precious metals production.

• Silver price for 4Q assumed at USD64/oz due to high market volatility.