Tokai Carbon (5301) Q3 2025 earnings summary

Executive summary

• Consolidated net sales for the first nine months of FY2025 decreased 8.2% year-over-year to ¥237,336 million, mainly due to the divestment of a German site in the Graphite Electrodes business and lower sales/prices in other segments, despite growth in Fine Carbon from U.S. subsidiary consolidation and memory semiconductor demand recovery.

• Operating income rose 40.0% year-over-year to ¥21,301 million, driven by a return to profitability in Graphite Electrodes and Smelting and Lining, aided by structural reforms, cost reductions, and prior-year impairment reversals.

• Net income attributable to owners surged 192.9% year-over-year to ¥16,354 million, supported by extraordinary gains including the sale of investment securities.

• The acquisition of Bridgestone's carbon black subsidiary in Thailand was completed, strengthening global collaboration and advancing a project to recover carbon black from used tires.

• Full-year performance outlook for FY2025 was revised upward based on recent trends, with continued focus on growth and sustainability initiatives.

Financial highlights

• Net sales: ¥237,336 million (-8.2% YoY); Operating income: ¥21,301 million (+40.0% YoY); Net income attributable to owners: ¥16,354 million (+192.9% YoY); Ordinary income: ¥21,061 million (+30.8% YoY); EBITDA: ¥44.0 billion (-5.9% YoY); EBITDA margin: 18.5% (+0.4pts).

• Gross profit for the period was ¥59,999 million, down from ¥61,107 million year-over-year.

• Comprehensive income dropped 44.4% year-over-year to ¥8,620 million.

• Extraordinary income included a ¥4,163 million gain on sales of investment securities.

Outlook and guidance

• FY2025 net sales forecast revised down by ¥20.0 billion to ¥321,000 million, mainly due to lower Carbon Black sales.

• Operating income forecast increased by ¥0.7 billion to ¥24,000 million, with additional Q4 costs from M&A and acquisition-related expenses.

• Net income attributable to owners forecast raised by ¥7.0 billion to ¥18,000 million, reflecting extraordinary gains.

• Dividend forecast for FY2025 is ¥30.00 per share, unchanged from the previous year.