Nippon Denko's underlying ordinary profit for the first half rose sharply year on year, prompting it to raise its full-year outlook. The company also indicated that it expects to increase its annual dividend to ¥17 and disclosed plans to strengthen shareholder returns.
Underlying ordinary profit for the first half was ¥4.5 billion, approximately double the year-earlier figure. The main factors were strong performance in the incineration ash recycling business and Japan's ferroalloy business. The measure is viewed as an indicator of profit excluding inventory effects and one-off factors. On an accounting basis, however, ordinary profit was a loss of ¥2.9 billion due to the recognition of an investment loss.
For the current fiscal year, the company expects underlying ordinary profit of ¥7.5 billion, an increase of ¥2.2 billion from the previous year and an upward revision of ¥1.5 billion from its outlook three months earlier. On an accounting basis, it forecasts ordinary profit of ¥1.5 billion, incorporating an investment loss of ¥7.2 billion. The company will continue to pursue a policy of securing a profit.
The company expects an annual dividend of ¥17 as part of its shareholder returns. Based on a payout ratio of 40%, the dividend is expected to comprise ¥5.5 for the first half and ¥17 for the full year. It also plans to acquire approximately ¥4.0 billion worth of treasury shares and cancel part of them on 21 August.
The Ninth Medium-Term Management Plan covers 2024 through 2027, while the company is also considering a new target vision looking ahead to 2030. As business conditions in Japan and overseas continue to change, it is reviewing its growth strategy centered on expanding the incineration ash recycling business, overseas expansion of its ferroalloy business and growth in functional materials.