Toray Industries (3402) Q1 2025 earnings summary

Executive summary

• Revenue for Q1 FY2024 rose 10.3% year-over-year to ¥637.7 billion, with core operating income up 67.8% to ¥36.8 billion and profit attributable to owners of parent up 92.6% to ¥26.9 billion.

• Growth driven by strong performance in Fibers & Textiles, Performance Chemicals, and Carbon Fiber Composite Materials segments.

• Emphasizes commitment to sustainability, innovation, and societal contribution as core management principles.

• Management measures and Project AP-G 2025 strategies are implemented company-wide for greater effectiveness and synergy.

• Performance Chemicals saw significant profitability improvement due to demand recovery in China and increased demand in films.

Financial highlights

• SI business revenue rose 2.2% year-over-year to JPY 1,311.5 billion, driven by strong carbon fiber for aircraft and water treatment.

• DI business revenue increased 9% year-over-year to JPY 181.3 billion, led by FPD equipment and OLED materials.

• Core operating margin improved to 5.8% from 3.8% year-over-year.

• Free cash flow increased to ¥20.6 billion from ¥12.5 billion year-over-year.

• Capital expenditures rose to ¥36.0 billion, with major investments in carbon fiber and PPS resin production.

Outlook and guidance

• FY2025 revenue forecast revised up to ¥2,620.0 billion (+6.3% YoY), with core operating income of ¥135.0 billion (+31.6%).

• Six-month revenue forecast raised to ¥1,310.0 billion (+9.2% YoY), with core operating income forecast at ¥70.0 billion (+43.8% YoY).

• Profit attributable to owners of parent projected at ¥81.0 billion (+269.9% YoY), with EPS of ¥50.56.

• Maintains AP-G 2025 targets: positive free cash flow over three years and DE ratio of 0.7 or lower.

• Assumes gradual global and Japanese economic recovery, but notes risks from US policy, China real estate, and FX volatility.