INES (9742) Q2 2024 earnings summary

Executive summary

• H1 FY2024 revenue was ¥19.612bn, down 1.9% YoY; operating profit fell 43.9% to ¥856m and net income fell 52.3% to ¥473m.

• Full-year guidance was reduced, primarily amid delays to municipal system standardization and related pressure on development demand and costs.

Financial highlights

• H1 revenue was ¥19.612bn versus ¥19.987bn YoY; gross profit was ¥4.120bn versus ¥4.603bn, down ¥483m.

• H1 operating profit was ¥856m, down ¥669m YoY; ordinary profit was ¥890m, down ¥673m, and net income was ¥473m, down ¥518m.

• Special gains and losses were ¥14m in H1 FY2024 versus approximately zero in H1 FY2023.

Outlook and guidance

• FY2024 forecast revised to revenue ¥41.5bn, operating profit ¥3.0bn, core operating profit ¥3.542bn, ordinary profit ¥2.8bn and net income ¥1.7bn.

• Versus the prior forecast, revenue was cut ¥1.5bn (-3.5%), operating profit ¥1.0bn (-25.0%), ordinary profit ¥1.2bn (-30.0%) and net income ¥900m (-34.6%).

• Versus FY2023 actual, revised revenue is down 2.1%; operating profit down 21.1%, core operating profit down 6.8%, ordinary profit down 27.9% and net income down 33.1%.

• Core operating profit excludes temporary expenses related to the office-location strategy.