AeroEdge (7409) Q4 2024 earnings summary

Executive summary

• Achieved record highs in revenue, operating profit, net profit, and EBITDA for the fiscal year ended June 2024, driven by yen depreciation, global air travel recovery, and growth in development contracts, despite only a slight increase in titanium aluminide blade sales due to supply chain and quality issues at major customers.

• Expanded business portfolio with new factory completion for non-LEAP engine parts, new material development contracts, and collaboration with JR Kyushu on additive manufacturing.

• Updated long-term supply contract with SAFRAN, extending LEAP blade supply through 2034 and increasing global market share from 35% to 40%.

• Listed on the Tokyo Stock Exchange Growth Market in July 2023.

• The company operates as a single segment focused on titanium aluminide blades for aircraft engines.

Financial highlights

• Revenue: ¥3,350 million, up 14.7% year-over-year, a record high.

• Operating profit: ¥705 million, up 47.1% year-over-year, a record high.

• Net profit: ¥699 million, up 3.8% year-over-year, a record high.

• EBITDA: ¥1,093 million, up 19.0% year-over-year.

• Gross profit margin: 45.1% (up from 41.2% previous year); gross profit at ¥1,512 million.

• Operating profit margin: 21.1% (up from 16.4% year-over-year).

• Cash and equivalents at year-end: ¥1,814 million.

Outlook and guidance

• FY2025 revenue forecast at ¥3,760 million (+12.2%), operating profit at ¥500 million (−29.1%), net profit at ¥450 million (−35.6%), and EBITDA at ¥1,004 million (−8.1%).

• Anticipates higher costs from upfront investments in new projects and R&D, with profit recovery expected from FY2026 as new projects ramp up.

• Market share for LEAP blades to rise to 40% from July 2024, with no major new capex required.