Artience (4634) Q2 2025 earnings summary

Executive summary

• Net sales and profit declined year-over-year in the first half of FY2025, mainly due to weak CNT dispersions, challenging overseas markets, and modest global recovery, despite solid results in polymers, coatings, and packaging materials.

• Overseas, optical pressure sensitive adhesives for displays and functional films in China performed strongly, while Japan saw increased sales from demand growth and price revisions.

• Foreign exchange losses, increased costs, and economic uncertainty contributed to lower ordinary profit, with profit attributable to owners of parent down 41.5% year-over-year.

• Comprehensive income turned negative at -¥4,556 million, compared to ¥27,994 million in the prior year period.

• Share buyback (up to 10 billion yen or 4.5 million shares) and share cancellation (3 million shares, 5.63% of total shares) were announced and executed to improve capital efficiency.

Financial highlights

• Net sales for 1H FY2025 were ¥168.7 billion, down 2.0% year-over-year; operating profit was ¥9.4 billion, down 11.2%.

• Ordinary profit fell 30.2% to ¥8.6 billion; profit attributable to owners of parent dropped 41.5% to ¥5.5 billion.

• Gross profit for the first half was ¥35,774 million, down from ¥37,411 million year-over-year.

• Total assets decreased to ¥444,973 million from ¥472,787 million at the previous fiscal year-end.

• Dividend per share for the year is forecast at ¥100.00, unchanged from the previous year.

Outlook and guidance

• Full-year FY2025 net sales forecast revised down to ¥355.0 billion; operating profit forecast lowered to ¥19.0 billion.

• Profit attributable to owners of parent forecast at ¥15.5 billion, down 11.4% from previous forecast.

• Operating profit is expected to remain below ¥20 billion due to increased upfront investment and continued weakness in CNT dispersions.

• Overseas growth expected in adhesives and liquid inks, especially in India and Southeast Asia; optical pressure sensitive adhesives in China to grow but at a slower pace.

• The revision reflects weaker-than-expected demand, especially in lithium-ion battery materials for automotive applications and continued economic uncertainty.