Mitsubishi Gas Chemical (4182): Briefing: See upside potential to guidance

Research evidence excerpt

Mitsubishi Gas Chemical (4182): Briefing: See upside potential to guidance

Mitsubishi Gas Chemical (4182): Briefing

Summary (13 May, 16:30)

Summary

FY3/26

• Higher sales of BT (bismaleimide triazine) materials, but earnings were pressured by

a decline in methanol prices and deterioration in profitability of MXDA (meta-

xylylenediamine) and its derivatives.

FY3/27 plan

• Expect higher revenue and earnings, driven by rising methanol prices and strong

demand for electronic materials.

• Middle East impact: Policy is to pass on higher production costs to selling prices;

crude oil assumption is US$90/bbl.

• DPS is planned at ¥110.

Middle East impact

• Limited at present, excluding the methanol facility in Saudi Arabia.

• Progressing cost pass-through to selling prices.

• Specific financial impact to be updated at the June business briefing and quarterly

results.

4Q losses

• Impairments recorded at multiple sites, including ultrapure hydrogen peroxide in

Taiwan.

FY3/26 results

• Equity income: Impairment recorded at methanol production company in Trinidad

and Tobago.

• Earnings bridge

o Volume: Increase in BT materials, offset by a decline in optical

polymers and polycarbonate.

o Pricing: Deterioration in methanol, polycarbonate (PC), and MXDA.

Extraordinary losses

Loss on cancellation of construction of MXDA plant in the Netherlands was -¥1.0bn.

Provisions for penalties are under negotiation and not recorded in FY3/26; expected to

be recognized in FY3/27. Impact on net profit is expected to be significantly mitigated

by tax effects.

• OP to increase due to higher sales of electronic materials and lower depreciation

following impairments in the previous year.

• Middle East impact incorporated to the extent currently measurable.

• Crude oil sensitivity under review.