Forside Co (2330) Q2 2024 earnings summary

Executive summary

• Consolidated operating revenue for Q2 FY2024 was ¥2,196 million, down 4.7% year-over-year, with an operating loss of ¥68 million and net loss attributable to parent shareholders of ¥75 million, reversing prior-year profits.

• Main businesses include Prize, Real Estate, Content, Events, Master Rights, and newly launched AI-related operations.

• Cost reduction efforts continued, including subsidiary mergers and operational streamlining, but cost pressures from rising labor, utility costs, and a strong yen persisted.

• New AI-related business launched in February 2024, contributing initial revenue mainly from GPU server agency fees, but has yet to secure major contracts.

Financial highlights

• Operating revenue: ¥2,196 million (down 4.7% YoY); operating loss: ¥68 million; net loss: ¥75 million.

• Gross profit: ¥935 million (96.5% of prior year Q2); gross margin declined as cost increases outpaced revenue.

• SG&A expenses: ¥1,003 million (109.7% of prior year Q2), driven by higher fees and costs in Real Estate.

• EPS for the period was -¥2.01, compared to ¥1.70 last year.

• No special gains recorded this period, compared to ¥25 million gain from equity sales last year.

Outlook and guidance

• Full-year consolidated operating revenue forecasted at ¥5,088 million, up 5.6% year-over-year, with operating profit of ¥103 million and net profit of ¥100 million.

• Dividend for FY2024 remains undecided, pending future performance.