Kanto Denka Kogyo (4047) Q1 2025 earnings summary

Executive summary

• Q1 FY2024 saw a recovery in operating profit and net income compared to Q1 FY2023, driven by improved specialty gas sales and reduced inventory valuation losses.

• Net sales for the first quarter ended June 30, 2024, were ¥15,445 million, down 5.3% year-over-year due to declines in Fine Chemicals and Fundamental Chemicals divisions.

• Ordinary profit reached ¥1,918 million, reversing a loss of ¥859 million in the prior year, while profit attributable to owners of parent was ¥1,165 million, compared to a loss of ¥310 million last year.

• Comprehensive income improved significantly to ¥2,151 million from a loss of ¥22 million in the previous year.

Financial highlights

• Net sales: ¥15.4B, down 5.3% year-over-year.

• Operating profit: ¥1.2B, up ¥2.6B from a ¥1.4B loss in Q1 FY2023.

• Ordinary profit: ¥1.9B, up ¥2.7B year-over-year.

• Basic EPS: ¥20.29, up from a ¥5.40 loss per share.

• Total assets increased to ¥126,314 million, and net assets rose to ¥67,297 million, with an equity ratio of 52.1%.

Outlook and guidance

• H1 FY2024 net sales forecast revised to ¥31.1B, with operating profit forecast at ¥1.9B.

• Full-year net sales forecast is ¥69,000 million, with operating profit of ¥4,900 million and profit attributable to owners of parent of ¥2,900 million.

• Dividend forecast for the fiscal year is ¥16.00 per share, up from ¥14.00 in the previous year.

• Specialty gases expected to outperform previous forecasts; battery materials outlook cautious due to EV market slowdown.

• FY2024 full-year forecasts remain unchanged pending further review of H2 battery materials demand.