Tokai Carbon (5301) Q4 2024 earnings summary

Executive summary

• Net sales declined 3.8% year-over-year to ¥350.1b due to weak steel and semiconductor markets, while Fine Carbon and Carbon Black segments grew on memory semiconductor demand and price increases.

• Operating income dropped 49.9% to ¥19.3b, with Smelting and Lining and Graphite Electrodes posting operating losses from weak demand and competition.

• Extraordinary losses, mainly from impairments in Smelting and Lining and Graphite Electrodes, resulted in a net loss of ¥56.7b for FY2024.

• EBITDA declined 19.5% to ¥61.1b, but the margin remained in the upper 10% range.

• Comprehensive income was negative ¥21.8b, reversing from a positive prior year.

Financial highlights

• Net sales: ¥350.1b (down 3.8% YoY); Operating income: ¥19.3b (down 49.9% YoY); Net loss: ¥56.7b due to ¥76.8b in extraordinary losses.

• EBITDA: ¥61.1b (down 19.5% YoY); EBITDA margin: 17.5% (down 3.4pp YoY).

• Cash flows from operating activities: ¥64.5b; Free cash flow: -¥6.3b.

• Cash and cash equivalents at year-end: ¥65.1b; Net interest-bearing debt: ¥99.0b.

• Dividend per share for FY2024 was ¥36.00.

Outlook and guidance

• FY2025 forecast: net sales ¥341.0b (down 2.6%), operating income ¥23.0b (up 18.6–20.2%), net income ¥11.0b; dividend forecast maintained at ¥30–36 per share.

• Medium-term plan "Vision 2030" targets ¥500b net sales, 20% EBITDA margin, and 12% ROIC.

• Focus on structural reform in Graphite Electrodes and Smelting and Lining, and growth in Carbon Black, Fine Carbon, and Industrial Furnaces.