Tokyo Ohka Kogyo (4186) Q3 2024 earnings summary

Executive summary

• Net sales rose 23.5% year-over-year to ¥146.5 billion, driven by strong semiconductor demand, generative AI, and growth in the Chinese market, with favorable exchange rates contributing.

• Operating income increased 50.5% year-over-year to ¥23.2 billion, and profit attributable to owners of parent more than doubled to ¥15.6 billion, aided by higher operating income and absence of prior year restructuring costs.

• The company continued executing its Medium-Term Plan 2024, with strong performance in Electronic Functional Materials and High-Purity Chemicals divisions.

Financial highlights

• EBITDA grew 39.2% year-over-year to ¥29.4 billion.

• Ordinary income rose 44.9% year-over-year to ¥24.0 billion.

• Gross profit for the nine months was ¥53.0 billion, up from ¥41.6 billion year-over-year.

• Basic earnings per share was ¥129.08, reflecting a 3-for-1 stock split effective January 1, 2024.

• Capital investments nearly doubled year-over-year to ¥20.3 billion, with R&D spending up 16.6% to ¥10.9 billion.

Outlook and guidance

• Full-year 2024 forecast remains unchanged: net sales of ¥193.4 billion (up 19.2%), operating income of ¥29.3 billion (up 29.0%), and profit attributable to owners of parent of ¥19.8 billion (up 55.8%).

• Assumes foreign exchange rate of $1 = ¥145 for the remainder of the year.

• Expect continued demand growth from generative AI and Chinese market, with new customer plant operations supporting revenue.

• No changes to previously revised forecasts as of July 26, 2024.