Adeka (4401) Q2 2025 earnings summary

Executive summary

• Net sales for FY2024 1H rose 4.0% year-over-year to ¥195.0 billion, with operating profit up 23.6% to ¥18.2 billion and net profit attributable to owners up 8.9% to ¥11.4 billion.

• The global economy showed gradual recovery, especially in emerging Asia, Europe, and the U.S., despite concerns over China and the Middle East.

• Growth was driven by strong performance in chemicals, especially polymer additives, electronic, and environmental materials, while food products and life science segments saw declines.

• The company revised its full-year forecast upward, projecting net sales of ¥426.0 billion and operating profit of ¥41.1 billion.

Financial highlights

• Operating profit increased by ¥3.4 billion year-over-year, mainly due to higher sales volume, favorable exchange rates, and improved net pricing.

• Gross profit increased from ¥47,289 million to ¥53,934 million year-over-year.

• Ordinary profit rose 8.6% to ¥16,866 million, and basic earnings per share increased to ¥112.55 from ¥103.20.

• Cash flows from operating activities improved to ¥33.0 billion, while cash and deposits decreased to ¥103.9 billion as of September 30, 2024.

• Comprehensive income dropped to ¥8,956 million from ¥20,882 million due to negative foreign currency translation adjustments.

Outlook and guidance

• Full-year net sales forecast revised to ¥426,000 million (up 6.6% year-over-year), with operating profit expected at ¥41,100 million (up 16.0%) and profit attributable to owners of parent at ¥24,500 million (up 6.6%).

• Dividend forecast for FY2024 was raised to ¥97 per share, with a payout ratio of 40.3%.

• Chemicals and life science segments are expected to drive growth in 2H, while food products face continued challenges.

• Moderate but stable global economic growth is expected, with attention to U.S., China, and Middle East developments.