Honyaku Center (2483) Q2 2024 earnings summary

Executive summary

• H1 FY3/24 revenue rose 3.6% YoY to ¥5,429m, led by interpreter services and translation demand in patents and industrial localization.

• Operating profit fell 9.8% to ¥350m, ordinary profit fell 6.7% to ¥364m, and net income fell 8.6% to ¥236m as SG&A increased.

Financial highlights

• Revenue increased ¥191m YoY; gross profit rose 3.2% to ¥2,555m, while SG&A grew 5.6% to ¥2,204m.

• Cost of sales rose 4.0% to ¥2,874m; reported gross margin was 47.0%, down 0.2 percentage points YoY.

Outlook and guidance

• FY3/24 guidance: revenue ¥11,550m (+5.5% YoY), operating profit ¥1,000m (+7.6%), ordinary profit ¥1,020m (+6.1%), and net income ¥700m (+1.9%).

• FY3/24 gross margin is forecast at 47.3%, up 0.9 percentage points; SG&A is forecast to increase 7.2% to ¥4,460m.

• FY3/25 mid-term targets: revenue ¥12.1bn, operating profit ¥1.1bn, net income ¥750m, operating margin 9.0%, and ROE 12.0%.