Zeon (4205) Q2 2025 earnings summary

Executive summary

• H1 FY2024 net sales rose 15% YoY to ¥213.3B, with operating income up 78% to ¥16.8B and net income up 19% to ¥12.3B, driven by higher sales volumes in COP and Optical films, price revisions, cost reductions, and production reforms.

• Q2 FY2024 saw net sales of ¥107.2B (+1% QoQ), operating income of ¥7.8B (-14% QoQ), and net income of ¥4.1B (-50% QoQ), impacted by production issues, maintenance, and foreign exchange losses.

• Growth was supported by strong performance in both Elastomer and Specialty Materials segments, despite global economic uncertainties.

Financial highlights

• H1 FY2024 ordinary income increased 43% YoY to ¥18.6B; operating profit increased by ¥7,341M YoY, ordinary profit by ¥5,553M, and net income by ¥1,941M.

• Basic earnings per share for the period was ¥58.47, up from ¥49.03 a year earlier.

• Q2 operating margin was 7.3%, with specialty materials segment showing strong YoY growth in both sales and operating income.

• Equity ratio improved to 69.7%, D/E ratio at 0.06.

• Total assets at September 30, 2024, were ¥534,416M, up ¥2,161M from March 31, 2024; net assets increased by ¥9,788M to ¥373,517M.

Outlook and guidance

• FY2024 full-year net sales forecast revised up to ¥415.0B (+5% to +8.6%), operating income to ¥23.5B (-11% to +14.6%), and net income to ¥19.0B (+9% to -8.9%).

• Dividend forecast raised to ¥70/share for FY2024, marking 15 consecutive years of increases.

• Share buyback upper limit increased to 20 million shares/¥20B, with retirement of acquired shares planned.

• Gain on sale of investment securities (approx. ¥8.4B) expected as extraordinary income in FY2025.

• Impact from partial suspension of Mizushima Plant expected to incur ¥1.9B in costs.