Tokai Carbon (5301) Q2 2025 earnings summary

Executive summary

• Net sales for the first half of 2025 decreased 7.5% year-on-year to ¥158.1 billion, but operating income surged 65.7% to ¥13.96 billion and net income rose 133.2% to ¥8.54 billion, driven by structural reforms and cost reductions.

• Free cash flow improved significantly year-over-year, supported by higher operating income and better working capital management.

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

• Announced full acquisition of Bridgestone's carbon black subsidiary in Thailand, expected to close in September, enhancing supply stability and competitiveness.

• The global economy faced a downward trend due to protectionist US trade policies and heightened geopolitical risks, impacting business performance.

Financial highlights

• Net sales: ¥158.1 billion (-7.5% YoY); operating income: ¥13.96 billion (+65.7% YoY); net income: ¥8.54 billion (+133.2% YoY); EPS: ¥40.00 (up from ¥17.17 YoY).

• EBITDA: ¥28.8 billion (-3.1% YoY); EBITDA margin: 18.2% (+0.8pt YoY).

• Return on sales: 8.8% (+3.9pt YoY); gross margin improved to 24.9% from 22.6% YoY.

• Interim dividend paid at ¥15 per share; annual dividend projected at ¥30 per share.

• Total assets decreased to ¥606.6 billion as of June 30, 2025, from ¥640.8 billion at year-end 2024; equity ratio stable at 45.3%.

Outlook and guidance

• Full-year 2025 forecast: net sales of ¥341.0 billion (+2.6% YoY), operating income of ¥23.3 billion (+20.2%), and net income of ¥11.0 billion.

• Annual dividend forecast maintained at ¥30.00 per share.

• No amendments to previously disclosed earnings or dividend forecasts.