Tosoh (4042) Q1 2025 earnings summary

Executive summary

• Net sales rose to ¥252.9B in 1Q FY2025, up 5.1% year-over-year, with operating income up 45.6% to ¥19.8B and profit attributable to owners of parent up 22.7% to ¥16.2B.

• Growth driven by higher selling prices, increased production post-maintenance, and strong Chlor-alkali and Engineering segments.

• Ordinary income increased 23.1% year-over-year to ¥27.4B, supported by foreign exchange gains from a weaker yen.

• The global economy remained stable but faces uncertainty from China's real estate market and inflation risks.

Financial highlights

• Operating income increased to ¥19.8B from ¥13.6B year-over-year; ordinary income rose to ¥27.4B from ¥22.2B.

• Gross profit increased to ¥58.7B from ¥49.9B year-over-year.

• Free cash flow turned negative at -¥2.8B, down from ¥18.7B in the prior year.

• Capital expenditures grew to ¥23.0B, up ¥6.5B; interest-bearing liabilities increased to ¥199.6B.

• Cash and cash equivalents at quarter-end were ¥146.8B.

Outlook and guidance

• FY2025 forecasts unchanged: net sales projected at ¥1,090.0B, operating income at ¥100.0B, and profit attributable to owners of parent at ¥59.0B.

• Dividend forecast maintained at ¥85.00 per share, with a payout ratio of 45.9%.

• Management notes ongoing uncertainty due to global economic risks and inflation.