Tokyo Ohka Kogyo (4186) Q3 2024 earnings summary

Executive summary

• Net sales rose 23.5% year-over-year to 146.5 billion yen, driven by strong demand for electronic functional materials, high purity chemicals, and the expansion of the generative AI and semiconductor markets, as well as favorable exchange rates.

• Operating income increased 50.5% year-over-year to 23.2 billion yen, with profit attributable to owners of parent more than doubling to 15.6 billion yen (+107.9% YoY).

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

• No changes to the previously revised full-year forecasts; strong growth expected to continue due to generative AI and new customer plant operations.

Financial highlights

• Net sales: 146.5 billion yen (+23.5% YoY); operating income: 23.2 billion yen (+50.5% YoY); ordinary income: 24.0 billion yen (+44.9% YoY); EBITDA: 29.4 billion yen (+39.2% YoY).

• Gross profit for the nine months was 52.97 billion yen, up from 41.59 billion yen year-over-year.

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

• Comprehensive income totaled 17.72 billion yen, up 2.1% year-over-year.

• Profit attributable to owners of parent: 15.6 billion yen (+107.9% YoY).

Outlook and guidance

• Full-year forecast maintained: net sales of 193.4 billion yen (+19.2% YoY), operating income of 29.3 billion yen (+29.0% YoY), and profit attributable to owners of parent of 19.8 billion yen (+55.8% YoY).

• Expect continued demand growth from generative AI and Chinese market, with new customer plants contributing.

• Dividend forecast: annual dividend of 58 yen, reflecting a 3-for-1 stock split and targeting 4.0% DOE; aiming for 7 consecutive years of dividend growth.

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