Tokai Carbon (5301) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 net sales decreased 2.2% to ¥80.3b, but operating income more than doubled to ¥7.1b and net income attributable to owners rose 85.9% to ¥3.0b, driven by cost reductions and lower fixed costs after prior impairments.

• EBITDA improved year-over-year, with margin maintained in the upper 10% range; free cash flow also improved.

• Financial soundness and liquidity remained high, with stable credit ratings and a slight increase in net D/E ratio due to exchange rate impacts.

• Operating income progress reached 69% of the first-half forecast, with over 50% progress in all segments except Graphite Electrodes and Industrial Furnaces.

• The company is executing "Vision 2030" targeting ¥500b net sales, 20% EBITDA margin, and 12% ROIC, focusing on structural reforms and growth markets.

Financial highlights

• Net sales: ¥80.3b (-2.2% YoY); operating income: ¥7.1b (+104.5% YoY); ROS: 8.9% (+4.7pt YoY).

• EBITDA: ¥14.6b (+6.5% YoY); EBITDA margin: 18.2% (+1.5pt YoY).

• Net income attributable to owners: ¥3.0b (+85.9% YoY); EPS: ¥14.18 (up from ¥7.63 YoY).

• Ordinary income: ¥6.5b (+38.1% YoY); gross profit: ¥20.0b (up from ¥18.5b YoY).

• Comprehensive income turned negative at (¥13.7b), mainly due to foreign currency translation losses.

Outlook and guidance

• Full-year and first-half FY2025 performance outlooks remain unchanged, with net sales forecast at ¥341.0b and operating income projected to rise 20.2% to ¥23.3b.

• Net income attributable to owners expected to increase 51.5% to ¥11.0b; dividend forecast maintained at ¥30 per share.