Tosoh (4042) Q2 2025 earnings summary

Executive summary

• Net sales for 1H FY2025 rose 8.6% year-over-year to ¥527.6B, driven by higher volumes, improved production, and favorable forex and naphtha prices.

• Operating income increased 47.6% to ¥47.4B, while ordinary income grew to ¥45.1B.

• Profit attributable to owners of parent declined by ¥1.8B to ¥24.9B, impacted by higher non-operating expenses, mainly foreign exchange losses.

• All major business segments except 'Other' posted higher sales and operating income.

• The global economy faced headwinds from higher interest rates, weak demand in China, and geopolitical tensions.

Financial highlights

• Net sales: ¥527.6B (+8.6%); operating income: ¥47.4B (+47.7%).

• Ordinary income: ¥45.1B (+¥0.7B); profit attributable to owners: ¥24.9B (-¥1.8B).

• Gross profit increased to ¥126.2B from ¥103.3B year-over-year.

• Capital expenditures rose to ¥44.2B; depreciation and amortization at ¥21.7B.

• Free cash flow was ¥2.0B, down from ¥25.0B year-over-year.

Outlook and guidance

• FY2025 net sales forecast at ¥1,090.0B (+¥84.4B); operating income forecast at ¥94.0B (+¥14.2B).

• Profit attributable to owners projected at ¥53.0B (-¥4.3B year-over-year).

• Full-year dividend forecast raised to ¥100/share, up from ¥85/share in FY2024.

• Assumptions include domestic naphtha price of ¥72,000/kL and exchange rate of ¥145/US$ for 2H.