TAKI CHEMICAL CO.,LTD. Q4 FY2024 earnings call

• Overall Interim Financial Performance

  • Consolidated revenue reached 20.969 billion yen, +7.4% YoY
  • Operating profit reached 1.702 billion yen, +48.0% YoY; ordinary profit reached 2.009 billion yen, +42.1% YoY
  • Net profit attributable to parent company shareholders reached 1.4 billion yen, +38.0% YoY; EPS hit 165.10 yen, up 45.30 yen YoY
  • Total assets stood at 60.658 billion yen, net assets at 39.476 billion yen, equity ratio at 64.4% (down 0.5pp from prior fiscal year-end)
  • Operating cash flow was -22 million yen, investing cash flow was -1.033 billion yen, financing cash flow was -0.671 billion yen; ending cash balance fell 1.742 billion yen YoY to 5.715 billion yen

• Strategic Execution

  • The company is executing its Medium-Term Management Plan 2028, focused on improving profitability of existing businesses
  • Completed the acquisition and consolidation of Rakuto Kasei Kogyo, reflecting its February-April 2025 results in the Chemicals segment
  • Implemented production rationalization in Agri Business and selling, general and administrative expense reduction in Petroleum Business to boost margins

• Capital Policy and Shareholder Return

  • Basic policy prioritizes stable ongoing dividends and balanced allocation of profits to growth-oriented capex/R&D and shareholder returns
  • Authorized a share repurchase program of up to 280,000 common shares, with a maximum total purchase amount of 0.7 billion yen, to be executed via Tokyo Stock Exchange market purchases from August 14, 2025 to May 31, 2026
  • Existing treasury shares will be used flexibly to support capital policy, shareholder return and growth strategy execution

1. Agri Business: 6.477 billion yen in revenue, +8.2% YoY; 0.461 billion yen in operating profit, +244.1% YoY. 30.9% of total consolidated revenue. 2. Chemicals Business: Total 9.642 billion yen in revenue, +10.5% YoY; 1.066 billion yen in operating profit, +22.0% YoY. 46.0% of total consolidated revenue. Breakdown: Water treatment chemicals: 6.313 billion yen revenue, +11.3% YoY; Functional materials: 3.24 billion yen revenue, +8.7% YoY; Other chemicals: 0.088 billion yen revenue, +19.0% YoY. The segment includes 3 months of results from newly consolidated subsidiary Rakuto Kasei Kogyo. 3. Building Materials Business: 1.837 billion yen in revenue, +2.8% YoY; 0.011 billion yen in operating profit, recovering from a 0.004 billion yen operating loss YoY. 8.8% of total consolidated revenue. 4. Petroleum Business: 1.034 billion yen in revenue, +12.1% YoY; 0.014 billion yen in operating profit, +432.0% YoY. 4.9% of total consolidated revenue. 5. Real Estate Business: 0.658 billion yen in revenue, -2.5% YoY; 0.385 billion yen in operating profit, +6.1% YoY. 3.1% of total consolidated revenue. 6. Transportation Business: 1.318 billion yen in revenue, -7.0% YoY; 0.145 billion yen in operating profit, -3.3% YoY. 6.3% of total consolidated revenue.

• Full-year consolidated guidance has been sharply upward revised from the February 2025 forecast:
  • Revised revenue: 41.6 billion yen, +1.5% (0.6 billion yen) above prior forecast, +6.9% above prior year actual results
  • Revised operating profit: 2.9 billion yen, +123.1% (1.6 billion yen) above prior forecast, +8.7% above prior year actual results
  • Revised ordinary profit: 3.55 billion yen, +91.9% (1.7 billion yen) above prior forecast, +12.3% above prior year actual results
  • Revised net profit attributable to parent company shareholders: 3.0 billion yen, +81.8% (1.35 billion yen) above prior forecast, +30.5% above prior year actual results
  • Revised EPS: 353.77 yen, +159.17 yen above prior forecast
• Ending dividend per share guidance has been upward revised from 60 yen to 75 yen, which includes 60 yen ordinary dividend, 5 yen 140th founding anniversary commemorative dividend, and 10 yen special dividend. The revision reflects the improved full-year earnings outlook and one-time gains from cross-shareholding sales.
• The upward guidance revision is driven by better-than-expected segment performance, progress in passing through higher raw material costs for water treatment chemicals via price adjustments, and expected special gains from the sale of policy-held cross-shareholdings and pure investment shares, which was done to improve capital efficiency and strengthen governance.

• Macroeconomic risks include rising domestic prices, uncertainty from U.S. trade and policy trends, and downside risks from volatility in financial and capital markets, which create an unclear operating outlook for the full fiscal year
• Intensified competition in the smartphone high-purity tantalum oxide market has led to declining sales volume for that product line within the Chemicals segment's functional materials category

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