Consolidated Financial Results for the Nine Months Ended December 31, 2024 (Japanese GAAP)

Feb 7, 2025 at 4:22 AM UTC · Issued by Toho Titanium Company, Limited

Consolidated Financial Results for the Nine Months

Ended December 31, 2024 (Japanese GAAP)

February 7, 2025

Company name:	Toho Titanium Co., Ltd.	Stock Exchange Listings: Tokyo
Code number:	5727	URL: https://www.toho-titanium.co.jp/en/
Representative:	Yasuji Yamao, Representative Director and President
Contact person:	Hiromu Tomeba, General Manager, Planning, Corporate Management Division
	Telephone: +81-45-394-5521

Scheduled date for commencement of dividend payments: ‒

Supplementary documents for financial results:	Yes
Financial results briefing:	No

(Figures of less than ¥1 million are rounded off.)

1. Consolidated Results for the Nine Months Ended December 31, 2024 (From April 1, 2024 to December 31, 2024)

(1) Consolidated Operating Results		(Percentage figures are changes from the same period in the previous fiscal year.)
	Net sales		Operating profit	Ordinary profit	Profit attributable to
		owners of parent

Nine months Ended	Millions of yen	%	Millions of yen	%	Millions of yen	%	Millions of yen	%
December 31, 2024	65,805	16.5	4,447	14.6	4,483	10.8	3,215	5.6
December 31, 2023	56,490	(3.4)	3,882	(49.2)	4,048	(45.2)	3,045	(43.3)

(Note) Comprehensive income	Nine months ended December 31,	2024:	¥ 3,184 million [6.3%]
	Nine months ended December 31,	2023: ¥ 2,994 million [(41.9%)]

Net income per share

Diluted net income

per share

Nine months Ended

Yen

December 31, 2024

45.19

‒

December 31, 2023

42.79

‒

(2) Consolidated Financial Position

Total assets

Net assets

Equity ratio

Millions of yen

December 31, 2024

125,788

57,881

46.0

March 31, 2024

126,002

56,547

44.9

(For reference) Shareholders'

equity

December 31,

2024: ¥57,881 million

March 31, 2024: ¥56,547 million

2. Dividends

Annual cash dividend per share

End of 1Q

End of 2Q

End of 3Q

Year-end

Total

Yen

FY2023

‒

6.00

‒

18.00

24.00

FY2024

‒

8.00

‒

FY2024 (Forecast)

8.00

16.00

(Note) Revisions to the

previously announced forecast of cash dividends: No

Fiscal year ended March 31, 2024 Breakdown of year-end dividends- Ordinary dividend ¥15.00 Commemorative dividend ¥3.00 (70th anniversary

commemorative dividend)

3. Consolidated Financial Forecasts for FY2024 (From April 1, 2024 to March 31, 2025)

(Percentage figures are changes from the same period in the previous fiscal year.)

Net sales

Operating profit

Ordinary profit

Profit attributable to

Net income per share

owners of parent

Millions of yen

Yen

FY2024

88,700

13.1

5,300

(5.8)

5,000

(20.3)

3,700

(25.3)

51.99

(Note) Revisions

to the previously announced forecasts: Yes

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Notes

Significant changes in scope of consolidation during the period: None
Adoption of accounting treatment specific to the preparation of quarterly consolidated financial statements: None
Changes in accounting policies and accounting estimates, and restatement

Changes in accounting policies owing to revisions in accounting rules and standards: Yes
Changes in accounting policies other than (i) above: None
Changes in accounting estimates: None
Restatement: None

Number of shares issued (common stock)

Number of issued shares at the end of the period (including treasury stock)

December 31, 2024:	71,270,910 shares	March 31, 2024:	71,270,910 shares
(ii) Number of shares of treasury stock at the end of the period
December 31, 2024:	98,836 shares	March 31, 2024:	98,836 shares
(iii) Average number of issued and outstanding shares during the period
December 31, 2024:	71,172,074 shares	December 31, 2023:	71,172,266 shares

A review of the quarterly consolidated financial statements by certified public accountants or audit corporations: No
Explanations and other special notes concerning the appropriate use of business performance forecasts (Notes concerning forward-looking statements)
Business performance forecasts and other forward-looking statements contained in this document are based on the information available to the Company at the time of its announcement and on certain assumptions that the Company considers reasonable. The Company makes no representations that they are achievable. Actual results may differ materially from the forecasts depending on a variety of factors.

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Attached Materials: Table of Contents
1. Qualitative Information on the Quarterly Results	4
(1)	Explanations on Operating Results	4
(2)	Explanations on Financial Position	5
(3)	Explanations on Consolidated Financial Forecasts and Other Future Forecast Information	5
2. Consolidated Financial Statements	6
(1)	Consolidated Balance Sheets	6
(2)	Consolidated Statements of Operations and Comprehensive Income (Loss)	8
(3)	Explanatory Notes to Consolidated Financial Statement	10
	Notes on the Assumption of a Going Concern	10
	Notes on Significant Changes in Shareholders' Equity	10
	Changes in Accounting Policies	10
	Segment Information, etc	11
	Notes on Statements of Cash Flows	11

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1. Qualitative Information on the Quarterly Results

(1) Explanations on Operating Results

During the first nine months of the fiscal year under review, the Japanese economy continued to see a moderate recovery, as personal consumption and capital expenditure picked up amid continued improvements in employment and income conditions and corporate earnings.

Globally, the US economy remained firm, and signs of recovery were visible in Europe and China. Nevertheless, the outlook for the world economy remains uncertain, given the impact of the policies of the new US administration, lingering concerns about the future of the Chinese economy, and the volatility of financial and capital markets, and other potential impacts.

In the titanium business, product sales remained firm due to recovery in demand for aviation applications and the supply chain implications of the conflict in Ukraine. The cost of imported raw materials and energy costs peaked but remained at elevated levels. The yen was weaker against the dollar compared to the same period of the previous fiscal year.

Under these conditions, net sales for the first nine months of the fiscal year under review were 65,805 million yen (a 16.5% increase compared to the corresponding period of the previous year), operating profit was 4,447 million yen (a 14.6% increase), ordinary profit was 4,483 million yen (a 10.8% increase) and profit attributable to owners of parent was 3,215 million yen (a 5.6% increase).

Results by business segment were as follows.

Titanium Metal Business

In the nine-month consolidated accounting period, sales in the titanium metal business were adversely affected by quality issues and a strike at Boeing, the leading US aircraft manufacturer. However, sales of exported sponge titanium for aviation were solid. Sales of titanium metal for general industrial application weakened due to overproduction by Chinese manufacturers and remained at a level comparable to the corresponding period of the previous year. In addition, with a rebound in demand, sales of high-purity titanium for use in semiconductors exceeded sales during the corresponding period of the previous year.

In terms of earnings, the titanium metal business posted net sales of 49,271 million yen (a 16.4% increase) and operating profit of 5,028 million yen (a 92.5% increase), due mainly to the weaker yen and sale price corrections.

Catalyst Business

Looking at the sales volume of catalysts in the nine-month consolidated accounting period, polyolefin exports from China surged due to an overcapacity of polyolefin. This had the effect of delaying recovery in production volumes at the Group's customers in China's neighboring countries. Nevertheless, signs of a rebound in catalyst usage were seen in other regions and, as a result, sales volume exceeded the level in the corresponding period a year earlier.

In this environment, the catalyst business posted net sales for the period of 7,446 million yen (a 35.9% increase year on year). Operating profit was affected by lower capacity utilization than in the corresponding period a year earlier due to inventory adjustments and came to 1,608 million yen (a 1.0% increase).

Chemicals Business

During the nine-month consolidated accounting period, sales of ultra-fine nickel powder, a key product, exceeded the level of the corresponding period of the previous year, as the impact of China's faltering economy on multilayer ceramic capacitators (MLCCs), the main application for ultra-fine nickel powder, started to diminish, and demand for MLCCs began to recover in each market, despite ongoing distribution inventory adjustments.

However, as a result of lower sale prices due to declining international nickel prices (London Metals Exchange price), and adjustments in the production of ultra-fine nickel powder to improve the inventory balance, the chemical business posted net sales for the period of 9,088 million yen (an increase of 4.6%) and an operating loss of 815 million yen (compared to profit of 948 million yen in the corresponding period of the previous year).

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Net Sales by Segment

			(Millions of yen)
Business Segment	Nine months ended	Nine months ended	Change
December 31, 2024	December 31, 2023

Titanium Metal	49,271	42,327	16.4%
Catalysts	7,446	5,478	35.9%
Chemicals	9,088	8,685	4.6%
Consolidated Total	65,805	56,490	16.5%
Operating profit by Segment
			(Millions of yen)

Business Segment	Nine months ended	Nine months ended	Change
December 31, 2024	December 31, 2023

Titanium Metal	5,028	2,612	92.5%
Catalysts	1,608	1,592	1.0%
Chemicals	(815)	948	‒
Common Costs and Expenses	(1,374)	(1,272)	‒
Not Allocated to the Individual Segments

Total	4,447	3,882	14.6%

(2) Explanations on Financial Position

Balance Sheet

Total assets as of December 31, 2024 fell by 213 million yen from March 31, 2024 to 125,788 million yen, with lower trade receivables and inventories among the major contributing factors.

Total liabilities as of December 31, 2024 amounted to 67,907 million yen, a decrease of 1,547 million yen from March 31, 2024, which is mainly attributable to decrease in short-term borrowings.

Total assets as of December 31, 2024 amounted to 57,881 million yen, an increase of 1,333 million yen from March 31, 2024, mainly as a result of an increase in retained earnings.

The shareholders' equity ratio as of December 31, 2024 increased to 46.0% from the 44.9% as of March 31, 2024.

(3) Explanations on Consolidated Financial Forecasts and Other Future Forecast Information

The Company revised the consolidated financial forecasts FY2024 that were announced on May 8, 2024. For details, please see the notice of revision of consolidated financial forecasts and dividend forecast for the fiscal year from April 1, 2024 to March 31, 2025 published on February 7, 2025.

Those forecasts are based on the information that is available to the Company as of the date of release of this document. The actual financial results may differ from the forecasts due to various factors.

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2. Consolidated Financial Statements

(1) Consolidated Balance Sheets

			(Millions of yen)
		March 31, 2024	December 31, 2024
Assets
Current assets:
Cash and deposits	1,880	6,357
Notes and accounts receivable - trade	18,752	13,971
Electronically recorded monetary claims - operating	289	297
Merchandise and finished goods	27,555	26,222
Work in process	10,804	10,149
Raw materials and supplies	14,212	14,892
Accounts receivable - other	876	1,300
Others	1,371	999
Total current assets	75,743	74,190
Non-current assets:
Property, plant and equipment
Buildings and structures, net	16,664	17,536
Machinery, equipment and vehicles, net	17,953	16,083
Tools, furniture and fixtures, net	560	721
Land	2,449	2,449
Leased assets, net	1,597	1,448
Construction in progress	7,962	10,964
Total property, plant and equipment	47,188	49,203
Intangible assets:
Software	776	713
Software in progress	34	‒
Others	16	10
Total intangible assets	826	724
Investments and other assets:
Shares of subsidiaries and associates	91	97
Deferred tax assets	675	59
Retirement benefit asset	810	827
Others	668	686
Allowance for doubtful accounts	(1)	(1)
Total investments and other assets	2,244	1,669
Total non-current assets	50,258	51,597
Total assets		126,002	125,788

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			(Millions of yen)
		March 31, 2024	December 31, 2024
Liabilities
Current liabilities:
Notes and accounts payable - trade	3,989	5,120
Short-term loans payable	36,142	34,346
Lease obligations	212	1,460
profit taxes payable	1,100	793
Provision for bonuses	1,790	922
Provision for directors' bonuses	187	119
Others	4,170	4,046
Total current liabilities	47,592	46,809
Non-current liabilities:
Long-term loans payable	18,372	18,982
Lease obligations	1,401	2
Asset retirement obligations	2,088	2,113
Total non-current liabilities	21,861	21,098
Total liabilities	69,454	67,907
Net assets
Shareholders' equity:
Common stock	11,963	11,963
Capital surplus	13,023	13,023
Retained earnings	31,642	33,007
Treasury shares	(78)	(78)
Total shareholders' equity	56,550	57,915
Accumulated other comprehensive income:
Foreign currency translation adjustment	(361)	(334)
Remeasurements of defined benefit plans	358	299
Total accumulated other comprehensive income	(2)	(34)
Total net assets	56,547	57,881
Total liabilities and net assets		126,002	125,788

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(2) Consolidated Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Operations

			(Millions of yen)
		Nine months ended	Nine months ended
		December 31, 2023	December 31, 2024
Net sales	56,490	65,805
Cost of sales	45,579	53,791
Gross profit	10,911	12,014
Selling, general and administrative expenses	7,029	7,567
Operating profit	3,882	4,447
Non-operating income:
Foreign exchange gains	308	196
Gain on sale of goods	35	28
Technical support fee income	‒	63
Insurance profit	32	24
Share of profit of entities accounted for using equity	10	11
method

Others	18	26
Total non-operating income	405	350
Non-operating expenses:
Interest expenses	158	231
Loss on disaster	‒	53
Others	80	29
Total non-operating expenses	239	314
Ordinary profit (loss)	4,048	4,483
Special income:
Gain on sales of fixed assets	0	6
Total special income	0	6
Special loss:
Loss on retirement of non-current assets	43	135
Total special loss	43	135
Profit before income taxes	4,005	4,354
Income taxes-current	497	771
Income taxes-deferred	461	367
Total income taxes	959	1,138
Profit	3,046	3,215
Profit attributable to non-controlling interests	0	‒
Profit attributable to owners of parent		3,045	3,215

―8―

Consolidated Statements of Operations and Comprehensive Income (Loss)

		(Millions of yen)
	Nine months ended	Nine months ended
	December 31, 2023	December 31, 2024
Profit	3,046	3,215
Other comprehensive income (loss):
Deferred gains or losses on hedges	(40)	‒
Foreign currency translation adjustment	1	27
Retirement benefits liability adjustment	(12)	(59)
Total other comprehensive income (loss)	(52)	(31)
Comprehensive income	2,994	3,184
Attributable to owners of parent	2,993	3,184
Attributable to non-controlling interests	0	‒

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(3) Explanatory Notes to Consolidated Financial Statements

Notes on the Assumption of a Going Concern:

None

Notes on Significant Changes in Shareholders' Equity:

None

Changes in Accounting Policies

(Application of the Accounting Standard for Current Income Taxes) The Accounting Standard for Current Income Taxes (ASBJ Statement No. 27, October 28, 2022; "2022 Revised Accounting Standard" hereafter) has been applied from the beginning of the first quarter of the current consolidated accounting period.

Regarding revisions related to the classification of income taxes (taxation of other comprehensive income), the Company is complying with the transitional treatment prescribed in the proviso to Article 20-3 of the 2022 Revised Accounting Standard and the transitional treatment prescribed in the proviso to Article 65-2(2) of the Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, October 28, 2022; "2022 Revised Guidance" hereafter). This change in accounting policy had no impact on the quarterly consolidated financial statements.

Furthermore, with regard to revisions related to the review of the treatment in consolidated financial statements of gains or losses arising from the sale of subsidiary shares, etc., among consolidated companies in cases involving deferral for tax purposes, the 2022 Revised Guidance has been applied from the start of the first quarter of the current consolidated accounting period. This change in accounting policy was applied retroactively; consolidated financial statements for the corresponding quarters of the previous year and the previous consolidated fiscal year have been restated to reflect this retroactive application. This change in accounting policy had no impact on quarterly consolidated financial statements for the corresponding quarters of the previous year or consolidated financial statements for the previous consolidated fiscal year.

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