CTI Engineering Co (9621) Q2 2024 earnings summary

Executive summary

• Orders received, sales, and operating income in the first half of FY2024 exceeded expectations, prompting an upward revision of full-year forecasts.

• Sales for the six months ended June 30, 2024, rose 6.6% year-over-year to ¥50,746 million, with operating income down 5.3% to ¥6,789 million and net income attributable to owners of the parent down 7.7% to ¥4,883 million.

• Orders received decreased 7.4% year-over-year to ¥54,545 million, but sales and profits exceeded initial semi-annual forecasts.

• Domestic consulting engineering benefited from steady public works budgets and disaster prevention initiatives, while overseas business saw mixed recovery, with Southeast Asia improving but UK and Australia facing uncertainty.

• Operating income and net income declined year-over-year, impacted by higher employee numbers and wage increases.

Financial highlights

• Orders received: ¥54,545 million (down 7.4% YoY); sales: ¥50,746 million (up 6.6% YoY); operating income: ¥6,789 million (down 5.3% YoY); net income: ¥4,883 million (down 7.7% YoY).

• Gross profit increased to ¥15,985 million from ¥15,388 million year-over-year.

• Operating income margin decreased to 13.4% from 15.0% YoY.

• Net income per share was ¥352.10, down from ¥379.67 year-over-year.

• Comprehensive income for the period was ¥6,302 million, a 3.1% decrease year-over-year.

Outlook and guidance

• Full-year consolidated sales forecast raised to ¥97,000 million (+9.0%), operating income to ¥9,600 million (+14.3%), and net income to ¥6,900 million (+13.1%).

• Full-year sales forecast revised to ¥97,000 million, up 4.2% year-over-year.

• Operating income forecast at ¥9,600 million (down 4.1%), ordinary profit at ¥9,700 million, and net income attributable to owners of the parent at ¥6,900 million (down 8.4%).

• Domestic and overseas segment forecasts both revised upward.

• Dividend forecast maintained at ¥150 per share for the year.