CMP Earnings Soar 38.7 Percent in 2024 but Warns of Slower 2025

Chugoku Marine Paints (CMP) reported robust growth for its 2024 fiscal year, with net profit surging 38.7% year-on-year to JPY 137.21 billion (approximately USD 925 million). Revenue reached JPY 1.31 trillion, marking a 12.9% increase, while operating profit jumped 26.2% to JPY 153.81 billion. The company attributes its strong performance to increased demand for high-value marine coatings, particularly in Korea and Southeast Asia, alongside pricing strategies that aligned with manufacturing costs.

In its flagship marine coatings business, CMP saw a surge in demand for large container ships and tankers, mainly from South Korean shipyards. Additionally, stricter fuel-efficiency regulations by the International Maritime Organization (IMO) boosted the global appetite for high-performance antifouling coatings. CMP capitalized on this by pushing premium products in Europe and Southeast Asia.

The industrial coatings segment saw solid growth, particularly in heavy-duty anti-corrosion coatings across Southeast Asia. However, gains in the container coatings segment were muted due to a decline in U.S. sales, despite modest growth in Southeast Asia.

Currency depreciation also played to CMP’s advantage, with the weakened yen lifting overseas earnings across all regions. However, rising raw material and transportation costs, along with increased investment in human resources, required tighter pricing controls and a focus on high-margin, eco-friendly products.

The company also booked a special gain of JPY 25 billion from the sale of its Shanghai second plant, which offset a JPY 9.28 billion impairment loss on real estate in Japan.

In Japan, sales grew 5.3% to JPY 427.21 billion, helped by strong newbuild and repair ship demand. China revenue rose 7.3% to JPY 213.98 billion, driven by increased output of port infrastructure coatings, though container coating inventory losses dragged on profit. South Korea recorded a staggering 63.7% sales jump, as major shipyards ramped up orders, while Southeast Asia and Europe/Americas also posted double-digit profit growth due to effective pricing strategies.

Looking ahead, CMP forecasts 2025 revenue at JPY 1.33 trillion, a modest 1.4% increase, and expects net profit to fall 19% due to the absence of one-off gains from asset sales. While industrial coatings in Southeast Asia are expected to remain strong, the company anticipates a decline in new ship construction income, particularly in South Korea, partially offset by growth in the ship repair market.

Despite a banner year, CMP is bracing for headwinds in the year ahead, balancing global uncertainties with strategic product shifts and disciplined cost management.