UBE (4208) Q1 2024 earnings summary

Executive summary

• Net sales rose 5.6% year-over-year to ¥115.4 billion, with operating profit up 11.0% to ¥2.9 billion and profit attributable to owners of parent up 31.4% to ¥4.8 billion.

• Growth was driven by strong performance in Polymers & Chemicals, especially nylon polymer and caprolactam, offsetting declines in Specialty Products, Machinery, and Others.

• Ordinary profit increased 30.8% year-over-year to ¥7.0 billion, aided by higher equity-method profit from cement-related affiliates.

Financial highlights

• Net sales increased by ¥6.2 billion year-over-year; operating profit rose by ¥0.3 billion to ¥2.9 billion.

• Gross profit increased to ¥19.7 billion from ¥18.5 billion year-over-year; operating margin improved to 2.5%.

• EPS rose to ¥49.49 from ¥37.66 year-over-year.

• Free cash flow was negative at ¥-16.3 billion due to higher capital expenditures.

• Shareholders' equity increased to ¥418.0 billion; D/E ratio improved to 0.55.

Outlook and guidance

• Full-year net sales forecast at ¥510.0 billion (+8.9%), operating profit ¥27.0 billion (+20.2%), and profit attributable to owners of parent ¥29.5 billion (+1.8%).

• 1Q progress toward full-year targets: 22.6% for net sales, 10.8% for operating profit.

• EPS for the year projected at ¥303.89; no revision to previous guidance.

• Dividend forecast raised to ¥110 per share for FY2025.

• ROE forecasted around 7% for FY2024, with a focus on expanding specialty businesses and improving profitability.