Densan System Holdings Co (4072) Q4 2024 earnings summary

Executive summary

• Net sales rose 2.8% year-over-year to ¥61.26 billion, but fell short of initial plans due to underperformance in payment agency services.

• Operating income dropped 41.7% year-over-year to ¥2.31 billion, mainly from increased costs and unprofitable projects in information services.

• Net income declined 7.7% year-over-year to ¥1.85 billion, but exceeded the revised plan due to gains from sales of investment securities.

• Ordinary profit fell 36.9% year-over-year to ¥2.53 billion.

Financial highlights

• Operating profit margin decreased from 6.7% to 3.8% year-over-year.

• ROE was 8.7% for the year.

• Total assets increased by ¥4.7 billion to ¥61.75 billion; equity ratio slightly decreased to 35.8%.

• Earnings per share were ¥173.88, down from ¥187.71 the previous year.

• Annual dividend for FY2024 planned at ¥60 per share, up from ¥37 in FY2023.

Outlook and guidance

• FY2025 net sales projected to grow 10.2% year-over-year to ¥67.5 billion, with operating profit expected to rise 51.4% to ¥3.5 billion.

• Ordinary profit forecasted at ¥3.53 billion (up 39.3%), and profit attributable to owners of parent at ¥2.53 billion (up 36.7%).

• Earnings per share forecasted at ¥236.82 for FY2025.

• Information services sales forecasted to increase 13.5% year-over-year, with a return to operating profit.

• Payment agency services sales expected to grow 5.0% year-over-year, with stable operating margins.

• Medium-term plan targets 10%+ annual sales growth and margin improvement through FY2027.