Toho Titanium Company, LimitedTSE: 5727

Financial Results FY2023

May 23, 2024 at 1:02 AM UTC · MarketScreener

Toho Titanium Co., Ltd.

May 16, 2024

Outline

FY2023 Financial Results Summary
FY2024 Entire-Year Financial Forecasts

1. FY2023 Financial Results Summary

FY2023 Consolidated Financial Results

			(In billions of JPY)
	FY2023	FY2022	Change
	Entire fiscal year	Entire fiscal year


Net sales	78.4	80.4	-2.0
Operating income	5.6	10.7	-5.1
Ordinary income	6.3	10.5	−4.3
Net income	5.0	7.5	−2.6

Average exchange rate	144.6	134.9
(151.4¥/$ at the end of the	(133.5¥/$ at the end of
(yen/$)
period)	the period)

Dividend (¥/share)	24.00	30.00

Net sales

■ Net sales decreased by 2.4% (−¥2.0 billion) year on year, with revenue from the titanium metal business rising but revenue from catalysts and chemicals falling.

Operating

results

■ Operating income: YoY −47.3% (−¥5.1 billion).

■ Ordinary income: YoY −40.5% (−¥4.3 billion).

■ Net income: YoY −34.0% (−¥2.6 billion).

FY2023 Net Sales and Operating Income by Segment

(In billions of JPY)

Net sales

FY2023	FY2023
(From October 1,	FY2023	FY2022	Change
(From April 1, 2023 to
2023 to March 31,	Entire fiscal year	Entire fiscal year	(Entire fiscal year)
September 30, 2023)
2024)

Titanium metal	27.4	32.0	59.4	54.4	+5.0
Catalysts	3.6	3.8	7.3	8.8	−1.5
Chemicals	5.7	6.0	11.7	17.2	-5.5

Total	36.7	41.8	78.4	80.4	−2.0

Operating	FY2023	FY2023
(From October 1,	FY2023	FY2022	Change
income	(From April 1, 2023 to	2023 to March 31,	Entire fiscal year	Entire fiscal year	(Entire fiscal year)
September 30, 2023)
		2024)
Titanium metal	1.3	3.2	4.5	6.5	−2.0
Catalysts	1.0	0.9	2.0	2.9	−0.9
Chemicals	0.8	0.2	0.9	2.6	-1.7
Common costs and
expenses not	(0.8)	(1.0)	(1.8)	(1.3)	−0.5
allocated to the

segments
Total	2.3	3.3	5.6	10.7	−5.1	5

					(C)2024 Toho Titanium Co., Ltd.

Titanium metal Catalysts Chemicals

Overview of Each Segment

FY2023 Overview

Sales were strong due to a recovery in aircraft-related demand and to continued moves away from supplies of Russian raw material in response to the war in Ukraine
Sales for general industrial applications remained steady compared to the previous fiscal year, while demand for high- purity titanium for semiconductors declined sharply
Increased costs of raw ore and electricity became apparent, leading to price corrections
As there were no more sales from inventories produced before the previous fiscal year's cost increases, profits significantly decreased
Demand for polyolefin catalysts softened due to the economic downturn in China
The establishment of a new polyolefin manufacturing facility in China led to excess supply capacity, resulting in significant production cuts in neighboring countries
The start of operations at a new factory (November 2022) increased the burden of fixed costs
MLCC demand continued to decrease due to rising interest rates in the US and a protracted decline in the Chinese economy
Soaring prices of raw materials, supplies, and utilities became apparent
Booked hedging profit due to falling raw material prices for nickel on the London Metal Exchange

Difference in Entire-Year Operating Income between

FY2023 and FY2022

(In billions of JPY)

6.5→4.5

Titanium metal

2.9→2.0

Catalysts

2.6→0.9

Chemicals

14.0

12.0

10.0

8.0

6.0

4.0

2.0

0.0

Sales volume

Price

Ore and

electric

Changes in

(×)5.4

(○)7.8

power

Exchange rate

inventories,

(×)4.8

Export

etc.

Sales volume

Depreciation

Exchange

(○)1.5

( )0.2

Other costs transportation

(×)0.6

of new plant

rate

Sales volume

(×)1.2

cost

(×)0.7

(○)0.4

Nickel ore-

(×)1.6

(○)0.4

Common

Costs, etc.

items

costs

(×)0.7

(○)0.6

(×)0.5

FY2022	FY2023
Operating	Operating
income	income
10.7	5.6

2. FY2024 Entire-Year Financial Forecasts

Titanium metal Catalysts

Chemicals

Business Environment by Each Segment

Business environment in FY2024

Demand for aircraft remains strong, and demand for high-purity titanium for semiconductors is recovering
We expect to see an increase in sales volume compared to the previous fiscal year by utilizing titanium sponge produced in Saudi Arabia, where facilities are operating at full capacity
Export prices for major customers in the calendar year 2024 are up about 10% year on year, and domestic prices for the first half of FY2024 will remain unchanged from the second half of FY2023, with a price increase factored in for the second half of FY2024
Operating rate at polyolefin plants is gradually recovering, and we expect customer inventory adjustments to progress in the latter half of FY2024
New PP equipment using our catalysts is scheduled to go into operation
Operating rate of catalyst equipment is expected to increase from about 70% in the previous fiscal year to around 80%
Inventory adjustment for communication applications such as smartphones is complete, but the recovery in demand is slow, and demand for automotive applications is expected to remain steady
Although demand for MLCCs will gradually recover, we anticipate a substantial increase in nickel sales volume in FY2025
We expect to see price declines compared to the previous fiscal year due to falling prices for nickel on the London Metal Exchange and lower sales for high-end smartphone applications
We are reducing capacity utilization of nickel powder equipment from about 60% in the previous fiscal year to around 40% in order to improve the inventory balance

FY2024 Consolidated Financial Forecasts

			(In billions of JPY)
	FY2024	FY2023	Change
	Entire fiscal year	Entire fiscal year

Net sales	95.3	78.4	+16.9
Operating income	5.7	5.6	+0.1
Ordinary income	5.0	6.3	-1.3
Net income	3.7	5.0	-1.3

Average exchange rate (yen/$)	145.0	144.6
(145.0¥/$ at the end of the	(151.4¥/$ at the end of the
	period)	period)
Dividend (forecast) (¥/share)	16.00	24.00

Net sales

Operating

results

■ Net sales will increase by 21.6% (+¥16.9 billion) year on year as we are targeting higher revenue from all businesses
and particularly the titanium metal business.
■ Operating income: YoY +1.3% (+¥0.1 billion). The chemicals business will see a substantial decline in revenue, but
profits from the titanium and catalysts will increase
■ Ordinary income: YoY −20.3% (−¥1.3 billion). Currency translation gains were booked at the end of the previous
fiscal year due to the depreciation of the yen.
■ Net income: YoY −25.3% (−¥1.3 billion).	10
(C)2024 Toho Titanium Co., Ltd.