Tokai Carbon (5301) Q3 2024 earnings summary

Executive summary

• Net sales for Jan–Sep 2024 declined 3.4% YoY to ¥258.6 billion, operating income fell 48.9% to ¥15.2 billion, and net income dropped 73.9% to ¥5.6 billion.

• EBITDA decreased to ¥46.7 billion (-17.8%), with the margin at 18.1% in the upper 10% range.

• Comprehensive income dropped 77.4% YoY to ¥15.5 billion, reflecting challenging global conditions and segment underperformance.

• Carbon Black and Fine Carbon segments grew, while Smelting & Lining and Graphite Electrodes saw sharp declines due to weak demand and competition.

• Financial soundness and liquidity remain high, with stable credit ratings and investment capacity.

Financial highlights

• Net sales: ¥258.6 billion (-3.4% YoY); Operating income: ¥15.2 billion (-48.9% YoY); Net income: ¥5.6 billion (-73.9% YoY).

• EBITDA: ¥46.7 billion (-17.8% YoY); EBITDA margin: 18.1% (-3.2 pts YoY).

• Gross profit: ¥61.1 billion (down YoY); EPS: ¥26.18 (prior year: ¥100.26).

• Total assets: ¥651.1 billion as of Sep 30, 2024; equity ratio: 50.3%.

• Return on sales: 5.9% (-5.2 pts YoY); net margin: 2.2% (prior year: 8.0%).

Outlook and guidance

• Full-year 2024 forecast: Net sales ¥370 billion (+1.7% YoY), operating income ¥23 billion (-40.6%), ROS 6.2%, EBITDA ¥65 billion, net income ¥15 billion, EPS ¥70.35.

• Annual dividend forecast unchanged at ¥30.00 per share.

• Ongoing restructuring of graphite electrode production; impact on full-year results to be reflected upon finalization.