Toho Titanium Company, LimitedTSE: 5727

Financial Results FY2024/1H

Nov 22, 2024 at 2:20 AM UTC · MarketScreener

Toho Titanium Co., Ltd. Financial Results FY2024/1H

(From April 1, 2024 to September 30, 2024)

November 18, 2024

Titanium metal

Catalysts Chemicals

Summary of Performance by Segment

Business environment in the first half of FY2024

Sales remained firm due to changes in the supply chain driven by the ongoing war in Ukraine, in addition to the recovery in demand for aircraft
Sales for general industrial applications were flat year on year, while sales for semiconductor applications increased year on year with demand for high purity titanium on a recovery track
Increases in raw ore prices and electricity rates have paused, but still remain high
Profit margins improved year over year due to revised sales prices and the weakening of the yen
Production volume at the Chigasaki Plant declined due to issues with titanium sponge equipment
Exports increased due to excess polyolefin production capacity in China, but the delayed recovery in production volume at our customers in neighboring countries had an impact
Some regions and customers showed signs of a recovery in demand for catalysts, and total sales volume increased year on year
Costs deteriorated due to a drop in equipment utilization rates from the second half of FY2023
Impacts such as the stagnating Chinese economy have bottomed out, and MLCC demand is on a gradual recovery track
Sales prices declined due to falling NiLME raw material prices
Major production adjustments to improve the inventory balance were conducted, primarily from July to September

FY2024/1H Consolidated Financial Results

			(In billions of JPY)

	FY2024/1H	FY2023/1H
	(From April 1, 2024	(From April 1, 2023	Change
	to September 30, 2024)	to September 30, 2023)
Net Sales	43.8	36.7	+7.1
Operating profit	2.4	2.3	+0.1
Ordinary profit (loss)	1.5	3.2	-1.7
Net income	1.0	2.4	-1.5

Average exchange rate (yen/$)	152.8	141.1
(142.7¥/$	(149.6¥/$
	at the end of the period)	at the end of the period)
Dividend (¥/share)	8.00	6.00

Net Sales

Operating

results

Net sales increased in all segments, and rose 19.5% (¥7.1 billion) year on year.
Operating income: YoY +3.1% (+¥0.1 billion)
Ordinary income: YoY -53.1% (-¥1.7 billion) Recorded a foreign exchange loss of ¥0.8 billion (down from a ¥0.9 billion gain the previous period)
Net Income: YoY -59.6% (-¥1.5 billion)

FY2024/1H Net Sales and Operating Income by Segment

			(In billions of JPY)

Net Sales	FY2024/1H	FY2023/1H	Change
	(From April 1, 2024	(From April 1, 2023
	to September 30, 2024)	to September 30, 2023)
Titanium Metal	32.8	27.4	+5.4
Catalysts	4.8	3.6	+1.2
Chemicals	6.2	5.7	+0.5
Total	43.8	36.7	+7.1

Operating profit	FY2024/1H	FY2023/1H	Change
	(From April 1, 2024	(From April 1, 2023
	to September 30, 2024)	to September 30, 2023)
Titanium Metal	3.3	1.3	+2.0
Catalysts	1.0	1.0	-0.1
Chemicals	(1.0)	0.8	-1.7
Common Costs and Expenses	(0.9)	(0.8)	-0.1
Not Allocated to the Individual
Segments
Total	2.4	2.3	+0.1

Difference in Operating Income between FY2024/1H and FY2023/1H

(In billions of JPY)

1.3→3.3

Titanium Metal

1.0→ 1.0

Catalysts

0.8→ (1.0)

Chemicals

7.0		Ore and electric power		Changes in inventories, etc.

			-1.9
6.0		+1.1	Other costs
			Sales volume
		-0.1
		Price				and price		Exchange rate	Costs, etc.
5.0					+0.3
		+1.0	Human resource investment			+0.3	-1.5
4.0		Sales volume		-0.2	Exchange rate			Sales volume	Nickel ore-

		+1.1			+1.1		Costs, etc.	+0.2	related items
							-0.4 Common costs
3.0							-0.6
				Impact due to issues			-0.1


2.0					with titanium			Impact from
				sponge equipment

					-0.2			improved Ni powder
1.0								inventory balance

									-0.9
0.0
FY2023/1H							FY2024/1H
(From April 1, 2023							(From April 1, 2024
to September 30, 2023)							to September 30, 2024)
Operating income							Operating income
	2.3							2.4

Cash Flow for FY2024/1H

(In billions of JPY)

	FY2024/1H
Current net income prior to tax deduction	1.4
Repayment	3.8
Credit for sales	5.2
Inventory	4.8
Corporate tax payment, etc.	(2.6)

Business cash flow (total)	12.6
Acquisition of fixed assets	(5.7)
Others, net	0.0

Investment cash flow (total)	(5.7)
Changes in loans	(3.3)
Lease debt payments	(0.1)
Payment of dividends	(1.3)
Others, net	-

Financing cash flow (total)	(4.7)
Foreign exchange difference	0.0
Subtracted balance	2.2

FY2023

6.2

7.4

(3.6)

(10.4)

(2.7)

(3.1)

(8.1)

0.1

(8.0)

11.7

(0.2)

(1.8)

(0.1)

9.6

(0.0)

(1.5)

Future Business Environment by Segment

Business environment, etc.

Titanium metal Catalysts Chemicals

We expect demand for aircraft applications to remain firm based on forecasts of major customers, but we will closely watch the impact of striking workers at Boeing, among other developments
Looking at sales for general industrial applications, a decline in demand should materialize
Negotiations over price increases are underway with major Japanese customers regarding prices in the second half of FY2024
We expect the operating rate of the polyolefin plant to gradually recover, but the outlook is uncertain
We plan to raise the equipment utilization rate while monitoring the sales situation
We project that sales volume of Ni powder for MLCC applications will continue to gradually recover
Equipment utilization rates have been increased as planned from October 2024

Regarding the consolidated full-year earnings forecast for FY2024, while the yen's current exchange rate is trending weaker (assumed exchange rate at the beginning of the period was ¥145/$), we have carefully examined sales performance after assessing market trends for each product, and will promptly disclose any revisions to earnings forecast if they become necessary.

Sales Volume of Main Products

Sales volume where 100 is sales volume in FY2021 (FY2021-24/1H actual, FY2024 forecast) Note: Results are doubled for FY2024 first half figures

	Titanium sales volume
160
140
120
100
80
60
40
FY21	FY22	FY23	FY24	FY
			1st Half	（Financial

				Forecasts）

	THC catalyst sales volume
160
140
120
100
80
60
40
FY21	FY22	FY23	FY24	FY
			1st Half	（Financial

				Forecasts）

	Ni powder sales volume
160
140
120
100
80
60
40
FY21	FY22	FY23	FY24	FY
			1st Half	（Financial

				Forecasts）

Management Philosophy

The Toho Titanium Group pursues the infinite possibility of titanium and the related technologies, and contributes to building a sustainable society by continuously supplying excellent products and services

Fundamental Policies

To put our Management Philosophy into practice, we adhere to the following three Fundamental Policies:

We give the highest priority to safety and compliance and operate a healthy and fair business.
We practice innovation and creativity to achieve continuous growth for our employees and organization.
We enhance communication with all stakeholders including customers, local communities, and shareholders, to develop relationships of mutual trust and symbiosis.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS

This material contains "forward-looking statements" related to future events, such as our expectations on future business and financial performance and financial conditions, which reflect the management's views and assumptions derived from information that is currently available and are subject to risk and uncertainties. All statements other than statements of historical fact are statements that could be considered forward-looking statements. When used in this material, words such as "believe," "estimate," "expect," "intend," "may," "plan," "project," "target," "will," or "would" and similar expressions, as they relate to Toho, are intended as forward- looking statements.

Many factors could cause the actual results, performance, or achievements to be materially different from any future performance or achievements that may be expressed or implied by such forward-looking statements, including, among others,

changes in general economic and business conditions,

the state of the regulatory environment or political situation, changes in currency exchange rates and interest rates,

introduction of competing products by other companies, lack of acceptance of new products by Toho's targeted customers, inability to meet efficiency and cost reduction objectives, changes in business strategy, and various other factors, both referenced and not referenced in this material. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. Toho does not intend or assume any obligation to update these forward-looking statements.