GS Yuasa (6674) Q2 2025 earnings summary

Executive summary

• Net sales for the first half of FY2024 rose 3.0% year-over-year to ¥264.5 billion, with operating income up 24.0% to ¥15.7 billion and net profit up 57.9% to ¥9.4 billion, driven by higher sales volumes, price revisions, and strong automotive and industrial battery demand.

• Growth was supported by robust replacement battery sales, increased industrial battery projects, improved equity in earnings of affiliates, and cost control.

• All profit levels, including net income attributable to owners of the parent, achieved record highs and exceeded initial forecasts.

• The company revised its full-year forecast upward for most segments except Automotive Lithium-ion Batteries, which faced profit declines due to lithium price drops.

Financial highlights

• Operating income before goodwill amortization was ¥16.1 billion, up 24.1% year-over-year; ordinary income rose to ¥14.5 billion, up 20.7% year-over-year.

• Gross profit rose by ¥4.9 billion to ¥60.0 billion; EPS increased 26.7% to ¥93.81.

• Free cash flow was negative ¥31.6 billion due to significant capital investments and land acquisition for BEV battery manufacturing.

• Equity ratio improved to 50.4%; total borrowings increased to ¥105.5 billion following bond issuance.

• Cash and cash equivalents at period-end were ¥49,358 million, down ¥10,948 million from March 31, 2024.

Outlook and guidance

• Full-year net sales forecast is ¥590.0 billion, with operating income expected at ¥44.0 billion (7.5% margin); profit attributable to owners of parent is projected at ¥26,000 million, down 18.9% from the previous year.

• No revisions have been made to the previously announced earnings or dividend forecasts.

• Automotive Batteries (Japan/Overseas) and Industrial Batteries forecasts revised upward due to strong 1H performance; Automotive Lithium-ion Batteries forecast revised downward.

• Risks in 2H include geopolitical tensions, exchange rate volatility, raw material price fluctuations, and prolonged stagnation in China.

• Automotive batteries in Japan expected to recover gradually in the second half, with replacement battery demand remaining strong.