Buffalo (6676) Q2 2024 earnings summary

Executive summary

• H1 FY2024 revenue rose 2.0% YoY to ¥70.0bn, while operating profit fell 45.7% to ¥1.7bn amid a sharp decline in IT segment profit.

• Food segment growth and higher profit partially offset weaker IT results; FY2024 guidance was revised down, with operating profit now forecast at ¥1.8bn.

Financial highlights

• H1 revenue was ¥70.0bn versus ¥68.7bn; operating profit was ¥1.7bn versus ¥3.3bn, ordinary profit ¥1.6bn versus ¥3.3bn, and net income ¥1.2bn versus ¥2.1bn.

• Revenue mix was IT 69.0% and Food 30.8%; IT sales declined 2.9% YoY, while Food sales increased 15.6%.

• Capital expenditure was ¥1.843bn, depreciation ¥1.404bn and R&D expense ¥1.567bn in H1.

Outlook and guidance

• FY2024 guidance was revised to revenue ¥148bn, operating profit ¥1.8bn, ordinary profit ¥1.6bn and net income ¥1.2bn, from prior forecasts of ¥150bn, ¥4.0bn, ¥4.3bn and ¥3.0bn, respectively.

• Revised guidance implies EPS of ¥71.35 versus the prior ¥177.98; H1 progress was 47.3% for revenue, 99.9% for operating profit, 103.0% for ordinary profit and 106.3% for net income.