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Earnings presentation5711Mitsubishi Materials CorporationIron and Steel, Nonferrous Metals

Supplementary Explanatory Materials for the Second-Quarter Financial Results for the Fiscal Year Ending March 2027

In the first half of the fiscal year ending March 2027, revenue and profit increased substantially owing to higher metal prices, yen depreciation, recovering demand and price optimization, resulting in record-high profit for a first half. Based on first-half results, the full-year forecasts for revenue, operating profit, ordinary profit and net income were revised upward, while the annual dividend forecast was unchanged.

Worth reading
66In focus
0–100. This measures how worthwhile something is to read, not how good or bad the company is.
Direction
Improvement
Direction inferred from the company’s description.
Scale
1056
¥100 million (year-on-year increase in operating income)
Wording
Conditional
How definitive the wording is.

Contents of this document

Earnings presentationSecond quarter of the fiscal year ending March 20278 items taken from the company’s own explanation
Financial Results Figures (The key points of this material are explained below)
Net Sales¥12,474 100 million+50.3%
Operating profit¥1,165 100 million+968.8%
Ordinary income¥1,579 100 million+846.1%
Net income¥1,208 100 million+2,135.2%
Results for the three months of the current quarter
Net Sales
¥6,504 100 million
Operating profit
¥835 100 million
Ordinary income
¥1,060 100 million
Full-year earnings forecast
Net Sales
¥24,500 100 million
Operating profit
¥1,650 100 million
Ordinary income
¥2,200 100 million
Net income
¥1,600 100 million
Annual Dividend
116 yen per share
ROIC
16.7 %
ROE
20.1 %
What the company explained in this material
Breakdown of Factors Affecting the ChangeReasons cited by the Company for the change in the figures.
Change in first-half ordinary profit
  • Foreign exchange effects¥102 100 million
  • Price variance (selling prices)¥1,120 100 million
  • Price variance (costs and other factors)¥-383 100 million
  • Volume variance¥54 100 million
  • Other (operating)¥162 100 million
  • Dividends received¥321 100 million
  • Equity-Method Income¥45 100 million
  • Other (non-operating)¥-11 100 million
Change vs. previous full-year forecast
  • Price variance (selling prices)¥265 100 million
  • Price variance (costs and other factors)¥116 100 million
  • Dividends received¥84 100 million
  • Equity-Method Income¥18 100 million
Assumptions Underlying the Business OutlookThe assumptions used by the company in preparing its forecast.
  • US dollar exchange rate159 yen/US$
  • Euro exchange rate182 yen/€
  • Copper prices606 ¢/lb
  • Gold prices$4,196 /oz
  • Palladium price$1,230 /oz
  • APT price (tungsten)$2,773 /MTU
New initiatives
  • Investment to expand tungsten scrap processing capacity at 日本新金属
  • Integration of domestic sales of cemented carbide products in Japan
  • Visits by executive officers to each site (medium-term strategy caravan)
  • Joint response by the tungsten and cemented carbide businesses to fluctuations in APT prices
Key KPIsA metric the company considers important as a management benchmark.
  • US dollar exchange rate (first-half average)159 yen/US$
    Year on year against the same period last year+13.0%
  • Copper price (first-half average)622 ¢/lb
    Year on year against the same period last year+184.0%
  • Gold price (first-half average)$4,392 /oz
    Year on year against the same period last year+1,025.0%
  • APT price (first-half average)$3,046 /MTU
    Year on year against the same period last year+2,581.0%
  • Full-year FCF forecast¥2,140 100 million
  • Full-year ROIC forecast16.7 %
  • Full-year ROE forecast20.1 %
Unit price and quantity metricsThese figures show sales broken down by price and volume.
  • Electrolytic copper sales volume (first half)146 thousand tonnes
  • Gold sales volume (first half)7 t
  • Silver sales volume (first half)102 t
  • Copper products sales volume (first half)63 thousand tonnes
Segment results
  • Smelting and Resource Circulation
    Net Sales¥9,421 100 million (YoY +60.2%)
    Operating profit¥890 100 million (YoY +2,970.0%)
    Ordinary income¥893 100 million (YoY +4,605.3%)
  • Copper products
    Net Sales¥2,378 100 million (YoY +52.9%)
    Operating profit¥113 100 million (YoY +1,514.3%)
    Ordinary income¥106 100 million (YoY +10,500.0%)
  • Cemented carbide products
    Net Sales¥884 100 million (YoY +27.9%)
    Operating profit¥189 100 million (YoY +243.6%)
    Ordinary income¥184 100 million (YoY +217.2%)
  • High-performance products
    Net Sales¥1,516 100 million (YoY +38.6%)
    Operating profit¥75 100 million (YoY +400.0%)
    Ordinary income¥75 100 million (YoY +476.9%)
  • Resources
    Operating profit-14
    Ordinary income¥395 100 million (YoY +1,097.0%)
  • Renewable Energy
    Net Sales¥39 100 million (YoY +77.3%)
    Operating profit¥10 100 million
    Ordinary income¥12 100 million
Financial targets
ROIC
Full-year forecast16.7 %
ROE
Full-year forecast20.1 %
Equity ratio
End of September 202628 %
Net debt-to-equity ratio
End of September 20260.56 Times
Annual Dividend
Annual
116 yen per share
Contents of this document
ItemDetails
Document typeEarnings presentation
Fiscal Period CoveredSecond quarter of the fiscal year ending March 2027
Net Sales¥12,474 100 million (YoY +50.3%)
Operating profit¥1,165 100 million (YoY +968.8%)
Ordinary income¥1,579 100 million (YoY +846.1%)
Net income¥1,208 100 million (YoY +2,135.2%)
Results for the three months of the current quarterNet Sales ¥6,504 100 million / Operating profit ¥835 100 million / Ordinary income ¥1,060 100 million
Full-year earnings forecastNet Sales ¥24,500 100 million / Operating profit ¥1,650 100 million / Ordinary income ¥2,200 100 million / Net income ¥1,600 100 million / Annual Dividend 116 yen per share / ROIC 16.7 % / ROE 20.1 %
Segment resultsSegment Smelting and Resource Circulation / Net Sales ¥9,421 100 million (YoY +60.2%) / Operating profit ¥890 100 million (YoY +2,970.0%) / Ordinary income ¥893 100 million (YoY +4,605.3%), Segment Copper products / Net Sales ¥2,378 100 million (YoY +52.9%) / Operating profit ¥113 100 million (YoY +1,514.3%) / Ordinary income ¥106 100 million (YoY +10,500.0%), Segment Cemented carbide products / Net Sales ¥884 100 million (YoY +27.9%) / Operating profit ¥189 100 million (YoY +243.6%) / Ordinary income ¥184 100 million (YoY +217.2%), Segment High-performance products / Net Sales ¥1,516 100 million (YoY +38.6%) / Operating profit ¥75 100 million (YoY +400.0%) / Ordinary income ¥75 100 million (YoY +476.9%), Segment Resources / Net Sales Not disclosed / Operating profit -14 / Ordinary income ¥395 100 million (YoY +1,097.0%), Segment Renewable Energy / Net Sales ¥39 100 million (YoY +77.3%) / Operating profit ¥10 100 million / Ordinary income ¥12 100 million
Breakdown of Factors Affecting the ChangeChange in first-half ordinary profit Factors Foreign exchange effects / Amount ¥102 100 million, Factors Price variance (selling prices) / Amount ¥1,120 100 million, Factors Price variance (costs and other factors) / Amount ¥-383 100 million, Factors Volume variance / Amount ¥54 100 million, Factors Other (operating) / Amount ¥162 100 million, Factors Dividends received / Amount ¥321 100 million, Factors Equity-Method Income / Amount ¥45 100 million, Factors Other (non-operating) / Amount ¥-11 100 million / Change vs. previous full-year forecast Factors Price variance (selling prices) / Amount ¥265 100 million, Factors Price variance (costs and other factors) / Amount ¥116 100 million, Factors Dividends received / Amount ¥84 100 million, Factors Equity-Method Income / Amount ¥18 100 million
Key KPIsIndicator US dollar exchange rate (first-half average) / Value 159 yen/US$ / Year on year against the same period last year 13 yen/US$, Indicator Copper price (first-half average) / Value 622 ¢/lb / Year on year against the same period last year 184 ¢/lb, Indicator Gold price (first-half average) / Value $4,392 /oz / Year on year against the same period last year $1,025 /oz, Indicator APT price (first-half average) / Value $3,046 /MTU / Year on year against the same period last year $2,581 /MTU, Indicator Full-year FCF forecast / Value ¥2,140 100 million / Year on year against the same period last year Not disclosed, Indicator Full-year ROIC forecast / Value 16.7 % / Year on year against the same period last year Not disclosed, Indicator Full-year ROE forecast / Value 20.1 % / Year on year against the same period last year Not disclosed
Unit price and quantity metricsIndicator Electrolytic copper sales volume (first half) / Value 146 thousand tonnes / Year on year against the same period last year Not disclosed, Indicator Gold sales volume (first half) / Value 7 t / Year on year against the same period last year Not disclosed, Indicator Silver sales volume (first half) / Value 102 t / Year on year against the same period last year Not disclosed, Indicator Copper products sales volume (first half) / Value 63 thousand tonnes / Year on year against the same period last year Not disclosed
Assumptions Underlying the Business OutlookItem US dollar exchange rate / Value 159 yen/US$, Item Euro exchange rate / Value 182 yen/€, Item Copper prices / Value 606 ¢/lb, Item Gold prices / Value $4,196 /oz, Item Palladium price / Value $1,230 /oz, Item APT price (tungsten) / Value $2,773 /MTU
Financial targetsROIC Full-year forecast 16.7 % / ROE Full-year forecast 20.1 % / Equity ratio End of September 2026 28 % / Net debt-to-equity ratio End of September 2026 0.56 Times
Annual DividendAnnual 116 yen per share / Interim Not disclosed / End of period Not disclosed
New initiativesInvestment to expand tungsten scrap processing capacity at 日本新金属, Integration of domestic sales of cemented carbide products in Japan, Visits by executive officers to each site (medium-term strategy caravan), Joint response by the tungsten and cemented carbide businesses to fluctuations in APT prices
Items this document does not state (15)
Gross Profit MarginOperating profit marginSelling, general and administrative expensesProgress against full-year forecastSelf-assessment against the planNumber of stores and locationsNumber of employeesRisk amount incorporated into the outlookMedium-term management plan targetsPayout ratioAcquisition of treasury sharesCapital expendituresOrders received and order backlogMarket Size / ShareKey points of the Q&A

These are items the company does not state in this document. We do not leave them blank, nor fill them in from other sources or by inference.

The reasons the company gives

The company's own explanation, not something inferred from the numbers.

The increase was driven by higher prices for metals such as tungsten, copper and gold, yen depreciation, expanding demand related to automobiles and semiconductors, optimization of prices for cemented carbide products, and increased sales to the semiconductor industry. The upward revision to the full-year forecasts mainly reflects higher metal prices, price optimization for cemented carbide products, and increased sales to the semiconductor industry during the first half.

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Supplementary Explanatory Materials for the Second-Quarter Financial Results for the Fiscal Year Ending March 2027 | Mitsubishi Materials Corporation (5711) timely disclosure | Komori