Financial Results
of the Second Quarter for FY2024
(April 1, 2024 - September 30, 2024)
November 13, 2024
TYO 7231
This material is not a disclosure document under the Financial Instruments and Exchange Act and does not guarantee the accuracy or completeness of its information. The forward-looking statements in this material are based on information available at the time the material was prepared and include uncertainties. Investors are advised not to make investment decisions based solely on this information. In no event will the Company be liable for any loss or damage whatsoever resulting from the use of this material.
Copyright©2024 Topy Industries, Limited All Rights Reserved.
Main points
•
•
•
•
1 Downward revision due to weak demand, but dividends maintained
In the first half of the fiscal year, challenges in each business due to weak demand
No full recovery in the second half leading to a downward revision for the full year
Dividend maintained at 103 yen per share
Profits maintained in the second half due to formation of sustainable selling prices and continued gap between steel material selling prices and steel scrap prices
•
•
2 Progress toward "Action to Implement Management that is Conscious of Cost of Capital and Stock Price"
Consolidation of production sites in China amid continuous optimization of the business portfolio
Setting of reduction targets for Cross-Shareholdings
Reduction of Cross-Shareholdings to less than 10% of consolidated net assets by March 31, 2026
Copyright©2024 Topy Industries, Limited All Rights Reserved. | 2 |
Table of contents
- Financial results for FY2024 2Q
- Full-yearearnings forecast for FY2024
- Progress toward "Action to Implement Management that is Conscious of Cost of
Capital and Stock Price" - Topics
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1. Financial results for FY2024 2Q
FY2024 2Q results (YoY)
Net sales | Decrease in sales |
Operating profit
Decrease in profit
FY2023 2Q | FY2024 2Q | YoY | ||
(100 millions of yen) | Results | Results | Change | Increase/decrease (%) |
Net sales | 1,659 | 1,485 | (174) | (10.5)% |
Operating profit | 40 | 6 | (34) | (84.9)% |
Operating profit | 2.4% | 0.4% | (2.0) points | ー |
margin | ||||
Ordinary profit | 49 | 9 | (40) | (82.2)% |
Profit attributable | 34 | 7 | (27) | |
to owners of | (77.9)% | |||
parent | ||||
Dividend per | 30 | 30 | - | ー |
share (yen) | ||||
(100 millions of yen)
(100 millions of yen)
1,000
Net sales Operating profit
40
38 |
24 |
50 |
800
(15)
15
6
17 | 21 | 18 16 |
6 |
(5)(9)(6) (9)(6)
15
1 5
600
400
974
1,251
1,561 1,659 1,485
(19) |
(23) |
200
(42)
FY2020 2Q | FY2021 2Q | FY2022 2Q | FY2023 2Q | FY2024 2Q |
Apr-Jun | Jul-Sep Oct-Dec | Jan-Mar | Apr-Jun | Jul-Sep Oct-Dec | Jan-Mar | Apr-Jun | Jul-Sep Oct-Dec | Jan-Mar | Apr-Jun | Jul-Sep Oct-Dec | Jan-Mar | Apr-Jun Jul-Sep |
FY2020 | FY2021 | FY2022 | FY2023 | FY2024 |
0
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Factors for change in operating profit (YoY)
Main factors behind decrease in profit
- Decrease in sales volume of undercarriage parts for construction machinery due to lower global demand for construction machinery
- Decrease in sales volume of wheels for passenger vehicles due to lower automobile production in Japan and overseas
- Decrease in selling prices of steel materials and continued high level of steel scrap prices due to sluggish domestic demand
• | Increase in labor costs and other costs | Exchange | |||||||||||||||||
rate for the 1H Results | 2H forecast | ||||||||||||||||||
period | |||||||||||||||||||
U.S. dollars | 142.6 | 152.5 | |||||||||||||||||
40 | |||||||||||||||||||
Chinese | 19.9 | 21.2 | |||||||||||||||||
Yuan | |||||||||||||||||||
Factors for increase in profit | |||||||||||||||||||
Factors for decrease in profit | |||||||||||||||||||
Steel | (4) | ||||||||||||||||||
(100 millions of yen) | |||||||||||||||||||
Automobiles | |||||||||||||||||||
Decrease in depreciation | |||||||||||||||||||
and | (31) | and repair costs | |||||||||||||||||
industrial | |||||||||||||||||||
Increase in logistics costs | |||||||||||||||||||
machinery | |||||||||||||||||||
and other costs | ＋5 | ||||||||||||||||||
Others | (6) | ＋11 | ＋0 | ||||||||||||||||
＋6 | |||||||||||||||||||
6 | |||||||||||||||||||
(41) | (4) | ||||||||||||||||||
(5) | (6) | ||||||||||||||||||
FY2023 2Q | Quantity & | Selling price | Raw | Energy & Sub | Foreign | Labor costs Other (repair | Cost | FY2024 2Q | |||||||||||
Operating | Variety mix | materials, | materials | exchange | costs, etc.) | improvement Operating | |||||||||||||
profit | etc. | profit |
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Business results by segment (YoY)
YoY change | |||||||||
FY2023 2Q Results | FY2024 2Q Results | ||||||||
increase/decrease % | |||||||||
Net sales | Operating profit | Net sales | Operating profit | Net sales | Operating profit | ||||
(100 millions of yen) | |||||||||
Steel | 543 | 46 | 515 | 28 | (28) | (5.1)% | (18) | (39.7)% | |
Automotive and | 1,012 | 21 | 934 | 4 | (78) | (17) | |||
Industrial Machinery | (7.6)% | (79.9)% | |||||||
Components | |||||||||
Others | 105 | 1 | 36 | 5 | (69) | (66.0)% | 4 | 440.7% | |
Head office | ― | (28) | ― | (31) | ― | ― | (3) | ― | |
Total | 1,659 | 40 | 1,485 | 6 | (174) | (10.5)% | (34) | (84.9)% | |
*Impact of the discontinuation of the Power Generation Business on Others
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(1) Steel Segment: business environment
- Market trend
・Domestic steel orders:
stagnation of domestic steel materials demand due to building delays in construction projects
- Trend of main costs
・Steel scrap prices: remaining at a high level
(¥1,000/tons)
(thousand tons) | Construction | |||||||||||||
8,000 | ||||||||||||||
Automobiles | ||||||||||||||
6,000 | Manufacturing excluding automobiles | |||||||||||||
4,000 | ||||||||||||||
2,000 | ||||||||||||||
0 | Jul-Sep | Oct-Dec | Apr-Jun Jul-Sep | Oct-Dec | Apr-Jun Jul-Sep Oct-Dec Jan-Mar | Apr-Jun Jul-Sep Oct-Dec | ||||||||
Jan-Mar | Apr-Jun | Jan-Mar | Jan-Mar | Jan-Mar Apr-Jun | ||||||||||
2020 | 2021 | 2022 | 2023 | 2024 | ||||||||||
Source: The Japan Iron and Steel Federation | ||||||||||||||
・Domestic crude steel production volume | ||||||||||||||
(thousand tons) | Blast furnace | |||||||||||||
20,000 | Electric furnace | |||||||||||||
10,000 | ||||||||||||||
0 | ||||||||||||||
Jan-Mar | Apr-Jun | Jul-Sep | Oct-Dec | Jan-Mar | Apr-Jun Jul-Sep | Oct-Dec | Jan-Mar | Apr-Jun Jul-Sep Oct-Dec Jan-Mar | Apr-Jun Jul-Sep Oct-Dec | Jan-Mar Apr-Jun Jul-Sep | ||||
2020 | 2021 | 2022 | 2023 | 2024 |
Source: The Japan Iron and Steel Federation
60
40
20
Source: Japan Metal Daily, The Japan ferrous raw materials association (H2, before maker furnace, average of 3 districts)
0 | January March May July September November January March May July September November January March May July September November January March May July September November January March May July September | ||||
2020 | 2021 | 2022 | 2023 | 2024 |
・Electricity prices: YoY decrease despite riding trend amid end of the renewable energy
levy exemption program
250 ※ Unit price for the Company's Toyohashi Plant Calculated with January 2020 unit price set at 100
200
150
100
50
0
January | April | July | October | January | April | July | October | January | April | July | October | January | April | July | October | January | April | July |
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(1) Steel Segment: business results
Net sales | 46 | (100 millions of yen) | ||
Operating | ||||
29 | 28 | |||
328 | 501 | 543 | 515 | |
424 | ||||
7 | ||||
0 |
- Status of sales (Unit: 1,000 tons, ¥1,000/tons)
FY2023 2Q FY2024 2Q Change
Shaped | 363 | 354 | (9) | ||
steel | |||||
Sales | |||||
Steel bars | 93 | 86 | (7) | ||
FY2020 2Q | FY2021 2Q |
7 | 5 | |||
3 | 3 | |||
0 | ||||
(3) (3) | ||||
(5) | ||||
FY2022 2Q | FY2023 2Q | FY2024 2Q | ||
31 | (100 millions of yen) | |||
31 | 800 | |||
27 | ||||
24 | ||||
22 | 20 19 | |||
20 | 600 | |||
9 | 400 | |||
2 | ||||
200 |
volume | |||||
Total | 456 | 439 | (17) | ||
Selling price (A) | 114.2 | 112.5 | (1.7) | ||
Steel scrap | |||||
Payout unit price | 49.5 | 50.0 | +0.5 | ||
(B) | |||||
Spreads | 64.7 | 62.5 | (2.2) | ||
(A-B) |
Apr-Jun Jul-Sep Oct-Dec | Jan-Mar Apr-Jun Jul-Sep Oct-Dec Jan-Mar | Apr-Jun Jul-Sep Oct-Dec Jan-Mar Apr-Jun | Jul-Sep Oct-Dec |
FY2020 | FY2021 | FY2022 | FY2023 |
0
Jul-Sep
Apr-Jun
Jan-Mar
FY2024
*Including internal sales |
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9
(1) Steel Segment: Factors of change in operating profit (YoY)
Main factors behind decrease in profit
•
•
•
46
Decrease in steel materials' selling prices as domestic demand stagnates due to delays in construction projects
Steel scrap prices remain high
Increase in repair, logistics and other costs
(4)
＋7 ＋0
(9)
(2)
(7)
Decrease in price difference
Factors for increase in profit Factors for decrease in profit
(100 millions of yen)
＋4
28
(7)
Decrease in | ||
price difference | Increase in repair costs (4) | |
(16) | Increase in logistic costs and | |
other costs (3) | ||
FY2023 2Q | Quantity & Selling price | Raw | Energy & Sub | Foreign | Labor costs Other (repair | Cost | FY2024 2Q |
Operating | Variety mix | materials, | materials | exchange | costs, etc.) | improvement | Operating |
profit | etc. | profit |
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