UBE (4208) Q4 2023 earnings summary

Executive summary

• FY2023 net sales fell 5.4% YoY to ¥468.2bn, while operating profit rose 38.5% to ¥22.5bn; ordinary profit and net income returned to profit.

• FY2024 guidance targets sales of ¥510.0bn and operating profit of ¥27.0bn, with growth led by Polymers & Chemicals and Specialty Products.

Financial highlights

• FY2023 ordinary profit was ¥36.3bn versus a ¥8.7bn loss; profit attributable to owners was ¥29.0bn versus a ¥7.0bn loss, and EPS was ¥298.59 versus negative ¥72.54.

• Operating profit increased ¥6.2bn YoY; price contributed ¥3.6bn, volume reduced profit by ¥3.5bn, and fixed costs and other factors contributed ¥6.2bn.

• FY2023 operating cash flow was ¥53.0bn and investing cash flow was negative ¥33.3bn, producing free cash flow of ¥19.6bn; ending cash was ¥35.9bn.

Outlook and guidance

• FY2024 forecast: net sales ¥510.0bn (+8.9%), operating profit ¥27.0bn (+20.2%), ordinary profit ¥37.0bn (+1.8%), and net income ¥29.5bn (+1.8%).

• FY2024 EPS is forecast at ¥303.89; profit before income taxes is ¥38.0bn, including forecast extraordinary income of ¥1.0bn.

• FY2024 sales growth is expected in separation membranes, separators, nylon polymers, composites and molding machines; operating profit growth is particularly tied to Polymers & Chemicals.

• FY2024 guidance includes capital investment of ¥81.0bn, depreciation and amortization of ¥27.0bn, and R&D expenses of ¥10.0bn.