DIC (4631) Q2 2024 earnings summary

Executive summary

• Net sales for the first six months of FY2024 reached ¥538.8 billion, up 4.6% year-over-year, driven by increased shipments of packaging inks and high-value-added products for electronics and mobility solutions, though local currency sales declined 1.5%.

• Operating income surged 120.3% year-over-year to ¥21.9 billion, reflecting improved product mix, cost reductions, and successful price maintenance in overseas markets.

• Net income attributable to owners of the parent rose to ¥6.4 billion, a 543.7% increase year-over-year, despite higher extraordinary losses.

• EBITDA for the period was ¥43.8 billion, up 33.6% year-over-year.

• Comprehensive income grew 29.5% to ¥50.6 billion, driven by foreign currency translation gains.

Financial highlights

• Gross profit rose to ¥113.1 billion from ¥94.7 billion year-over-year.

• Operating margin improved from 1.9% to 4.1% year-over-year.

• Free cash flow turned positive at ¥7.3 billion, compared to negative ¥38.0 billion in the prior year.

• Earnings per share (basic) rose to ¥67.77 from ¥10.53.

• Total assets increased to ¥1,338.3 billion, and net assets to ¥429.9 billion.

Outlook and guidance

• Full-year forecasts for operating income, ordinary income, and net income were revised upward, with net sales guidance at ¥1,100.0 billion, up 5.9% year-over-year.

• Operating income is now expected to reach ¥40.0 billion (+122.9% year-over-year), with an operating margin of 3.6%.

• Net income attributable to owners of the parent projected at ¥16.0 billion, returning to profitability.

• Annual dividend forecast remains at ¥100 per share.

• Management anticipates continued recovery in demand for electronics and mobility solutions, with price adjustments to offset raw material cost increases.