Kureha : FY2023 1Q Results

FY2023 1Q Results

August 8, 2023

Key Takeaways

1QFY23 Operating Results

(billion yen)	FY23	FY22			FY23 Forecast
	Change		Full-
	1Q	1Q	Yoy		1H	2H	year
Advanced Materials	16.4	24.5	-8.1	39.0	40.0	79.0
Specialty Chemicals	9.2	6.6	2.6	19.0	15.6	34.6
Specialty Plastics	11.7	11.9	-0.2	23.8	23.3	47.1
Construction	2.2	1.9	0.2	6.0	6.0	12.0
Other operation	4.3	4.3	-0.0	8.2	9.1	17.3
Revenue	43.8	49.3	-5.5		96.0	94.0	190.0
Advanced Materials	1.2	5.6	-4.5		2.6	10.4	13.0
Specialty Chemicals	0.7	-0.3	1.0	1.5	-0.3	1.2
Specialty Plastics	2.2	2.1	0.1	3.0	2.6	5.6
Construction	0.1	0.1	-0.0	0.2	0.3	0.5
Other operation	0.6	0.6	-0.0	0.7	1.0	1.7
Core operating profit	4.8	8.1	-3.4		8.0	14.0	22.0
Adjustments	0.2	0.0	0.2
Operating profit	4.9	8.1	-3.2		8.0	14.0	22.0
Profit attributable to	3.2	5.5	-2.2		5.3	10.2	15.5
Kureha

1

• 1Q revenue and earnings decreased YOY primarily due to weaker PVDF performance in Advanced Materials
• PVDF price, interlinked with raw material prices, continued to slide after 1Q last year: profit margin improvement is likely seen in the second half year when existing inventory (with high raw material cost) is replaced by new items.
• YOY growth in Specialty Chemicals revenue and earnings resulted from a front-loaded shipment for agrochemicals, which however will not impact half-year/full-year segment earnings forecasts

2

FY2023-1Q Financial Summary (1)

(in billions of yen except for per-share values)

	1Q	1Q	Change
	FY22	FY23	YOY
Revenue	49.3	43.8	-5.5
(-11.2%)
Core operating profit	8.1	4.8	-3.4
(-41.5%)
Adjustments	-0.0	-0.1	-0.1
Other income	0.2	0.4	0.2
Other expenses	0.2	0.1	-0.1
Operating profit	8.1	4.9	-3.2
	(-39.4%)
Financial income	0.4	0.7	0.3
Financial expenses	0.1	0.0	-0.0
Profit before taxes	8.5	5.6	-2.9
	(-34.2%)
Profit for the period	5.5	3.2	-2.2
attributable to Kureha	(-40.7%)
Basic profit per share(¥)	¥279.79	167.25
(Currency exchange rates)
1USD =	¥129.7	I¥137.5
1EUR =	¥138.3	¥149.6
1CNY =	¥19.6	¥19.6

Vs. 1QFY22

• Revenue fell due largely to weaker sales of PVDF (LiB binder) and packaging materials
• Core operating profit declined on weakening in Advanced Materials
• Operating profit decreased as a result of fewer core operating profit
• Profit attributable to Kureha decreased as a result of fewer profit before taxes

3

FY2023-1Q Financial Summary (2)

Segment performance (vs. 1QFY21)

(in billions of yen)

24.5

16.4

6.6

Revenue		1QFY22	5.6	Core operating profit		1QFY22
		1QFY23			1QFY23

11.9 11.7																		2.1 2.2
9.2				1.9	2.2	4.3 4.3				1.2			0.7					0.1 0.1	0.6 0.6
												-0.3

Advanced	Specialty	Specialty Construction	Other	Advanced	Specialty	Specialty Construction	Other
Materials	Chemicals	Plastics	Operations	Materials	Chemicals	Plastics	Operations

Factors affecting core operating profit

AM: Lower pricing for PVDF to reflect lower raw materials prices, impact of existing inventory with high input cost related to PVDF

SC: Sales expansion for agrochemicals and industrial chemicals

SP: Higher home products and fishing line sales partially offset by softening in packaging materials

CO: Construction volume growth in private sector offset by higher material cost

OO: Higher industrial waste treatment volume offset by softening in transportation and hospital operation

Segment Performance:

Advanced Materials

(in billions of yen)
	1Q	1Q	Change
	FY22	FY23	%
Advanced Materials
Advanced plastics	19.2	11.9	-38%
Carbon products	1.5	1.9	+26%
Other	3.7	2.6	+31%
Revenue	24.5	16.4	-33%
Operating profit	5.6	1.2	-79%

4

Vs. 1QFY22

Revenue ➘ Operating profit ➘

Advanced plastics revenue and profit down:

• Sales expansion for PPS and PGA - Lower PVDF pricing

Carbon products revenue and profit up:

• Higher carbon fiber volume in the high-heat furnace insulation market