HIMACS (4299) Q1 2024 earnings summary

Executive summary

• Q1 FY2024 revenue fell 2.3% YoY to ¥4,335 million as delayed project launches weighed on sales; operating income declined 29.1% to ¥285 million.

• Gross margin held at 20.5%, while higher SG&A, including personnel and training costs, pressured profit.

Financial highlights

• Revenue was ¥4,335 million, down ¥102 million or 2.3% YoY; gross profit was ¥887 million, down 2.5%.

• Operating income was ¥285 million, down 29.1%; ordinary income was ¥287 million, down 29.0%; quarterly net income was ¥196 million, down 29.0%.

• SG&A rose 18.5% to ¥602 million, including higher employee compensation and increased new-hire payroll and training expenses.

• Operating income declined by ¥117 million: lower gross profit (-¥23 million), outsourcing-rate increases (-¥21 million), new-hire costs (-¥37 million), and capability-building expenses (-¥58 million) were partly offset by productivity gains (+¥22 million).

Outlook and guidance

• FY2024 revenue guidance remained ¥18,150 million, +4.7% YoY; revised operating income to ¥1,680 million, ordinary income to ¥1,690 million, and net income to ¥1,150 million.

• Full-year profit forecasts were raised by ¥100 million for operating income, ¥105 million for ordinary income, and ¥70 million for net income; revised EPS is ¥98.69.

• Revised Q2 cumulative guidance: revenue ¥8,840 million, operating income ¥660 million, ordinary income ¥665 million, net income ¥455 million, and EPS ¥39.07.

• The outlook reflects a certain level of visibility on productivity improvements and better pricing; actual results may vary materially due to multiple factors.