ANEST IWATA (6381) Q2 2024 earnings summary

Executive summary

• Net sales rose 4.5% year-on-year to ¥27,060 million, driven by strong overseas sales in Europe, Americas, and China, while Japan remained weak.

• Operating profit increased 3.3% year-on-year to ¥2,962 million, supported by improved cost-to-sales ratio despite higher labor costs.

• Ordinary profit and net profit declined 12.4% and 16.3% year-on-year, mainly due to foreign exchange losses and margin pressures.

• Interim dividend of ¥22 per share was paid as planned; annual dividend forecast is ¥50.00 per share.

• Global economic recovery was gradual, with overseas strength offsetting domestic weakness.

Financial highlights

• Net sales: ¥27,060 million (+4.5% YoY); operating profit: ¥2,962 million (+3.3% YoY); ordinary profit: ¥3,462 million (–12.4% YoY); net profit: ¥2,194 million (–16.3% YoY).

• Gross profit margin improved to 45.9% (+1.0 pts YoY); SG&A expenses ratio increased to 35.0% (+1.2 pts YoY) due to higher labor costs.

• Basic EPS decreased to ¥55.35 from ¥64.82 year-over-year.

• Cash and cash equivalents at period end were ¥13,732 million, down 6.0% from March 31, 2024.

• Operating cash flow increased 58.8% year-over-year to ¥3,040 million; investing and financing cash flows were negative.

Outlook and guidance

• Full-year forecast unchanged: net sales ¥58,000 million (+8.6% YoY), operating profit ¥6,800 million (+10.1%), ordinary profit ¥7,800 million (+2.3%), net income ¥4,950 million (+0.4%), and EPS ¥123.91.

• Annual dividend forecast is ¥50.00 per share.

• Uncertainties remain regarding China’s economic slowdown, global monetary policies, currency trends, and geopolitical risks.

• Overseas sales, especially in air energy and coating, are expected to drive growth; labor and investment costs to be offset by increased gross profit.