Daiseki (9793) Q1 2025 earnings summary

Executive summary

• Achieved record high ordinary profit and profit attributable to owners of parent for Q1 FY Feb 2025, with consolidated net sales and profits exceeding forecasts due to increased market share, higher wastewater and recycled fuel volumes, and receipt of subsidies for environmentally friendly capital investment.

• Net sales for the three months ended May 31, 2024, were ¥16,703 million, down 6.5% year-over-year, with operating profit at ¥3,906 million (down 0.7%), ordinary profit at ¥4,220 million (up 4.4%), and profit attributable to owners of parent at ¥2,687 million (up 10.5%).

• Industrial waste treatment saw growth in wastewater collection and strong recycled fuel shipments, while soil remediation sales and profits declined due to the absence of large-scale deals from the prior year.

• Lead recycling outperformed plans due to high lead prices and yen depreciation; tank washing business operated near full capacity but recorded lower sales due to project timing.

Financial highlights

• Consolidated net sales rose 16.5% year-over-year to ¥17,874 million; operating profit was ¥3,935 million, down 0.7% YoY; ordinary profit reached ¥4,040 million, up 4.4% YoY; profit attributable to owners of parent was ¥2,431 million, up 10.5% YoY.

• Gross profit for the quarter was ¥5,862 million, with a gross margin of 35.1% (up from 33.2% year-over-year).

• Basic earnings per share rose to ¥55.55 from ¥49.30 year-over-year.

• Comprehensive income for the quarter was ¥2,850 million, up 8.1% year-over-year.

• Net assets decreased to ¥87,719 million, mainly due to treasury share purchases.

Outlook and guidance

• Full-year consolidated net sales forecast at ¥65,600 million, with Q1 progress rate at 25.4%.

• Full-year forecast for FY2025: net sales ¥65,600 million (up 5.2%), operating profit ¥14,000 million (up 5.5%), ordinary profit ¥14,100 million (up 8.7%), profit attributable to owners of parent ¥8,700 million (up 8.0%), and basic EPS ¥180.88.

• Aims to achieve ROE of 12.0% by FY ending Feb 2027 and 15.0% by FY ending Feb 2031.

• Plans to acquire treasury shares worth approximately ¥12 billion over the next three years.

• Dividend forecast for FY2025 is ¥66.00 per share, unchanged from the previous year.