MORESCO, the Tokyo-listed specialty lubricants and hot-melt adhesives maker, has raised its operating-profit forecast for the year to February 2027 from ¥2.4bn to ¥4.5bn, an increase of 87.5%, in a revised-forecast notice issued on October 15. Sales are now guided at ¥40bn, up from ¥37bn, and net profit attributable to owners of the parent at ¥2.8bn, up from ¥1.55bn.
Several drivers, not one
The company gives more than one reason. Car production rose outside China, lifting sales of die-casting oils and many other oil types. Raw-material price increases are being passed through at home and abroad. Higher-value products, led by hard-disk surface lubricants for data centres, sold more, and the clear-out of unprofitable hot-melt adhesive products progressed.
The interim results show how far the first half has already run. Operating profit for the six months to August 31 was ¥2.457bn, up 158.8% on ¥949mn a year earlier, on sales of ¥19.625bn, up 16.4%. That half-year figure already exceeds the earlier ¥2.4bn full-year forecast.
Dividend
MORESCO raised its year-end dividend forecast by ¥40 to ¥70 a share, taking the forecast annual payout to ¥95 against the earlier ¥55. The interim dividend is ¥25 a share, with payment scheduled to start on November 11. The company puts the implied consolidated payout ratio at about 31%, against a medium- to long-term target of at least 30%.
A separate loss that does not touch the guide
In its standalone accounts, MORESCO booked a ¥504mn impairment on its investment in its Tianjin subsidiary. The company says the loss is eliminated on consolidation and does not affect consolidated results. It uses a reversal method for interim valuations, so the amount could change depending on the investment's value from the third quarter onward. Separately, as the subsidiary's dissolution and liquidation proceeds, MORESCO is booking a ¥384mn consolidated special loss for the half-year. The company also cautions that actual results may differ from the forecasts.