INFRONEER Holdings (5076) Q1 2024 earnings summary

Executive summary

• Q1 FY2024 net sales rose 7.2% YoY to ¥160.4bn; operating profit fell 29.7% to ¥5.2bn, while parent-attributable profit declined 24.2% to ¥4.0bn.

• Sales grew in building, civil engineering, road civil engineering and machinery, offset by a sharp decline in infrastructure management sales and lower consolidated gross profit.

• Excluding the prior-year renewable-energy project sale gain, sales and income increased YoY, supported by project completions and design changes.

• Full-year plans were expected to progress steadily; construction backlog was at record levels and added value was forecast to reach a record high.

Financial highlights

• Net sales were ¥160.4bn versus ¥149.6bn; gross profit was ¥20.4bn versus ¥21.2bn, SG&A ¥15.2bn versus ¥13.9bn, and operating profit ¥5.2bn versus ¥7.4bn.

• Ordinary profit declined 27.5% YoY to ¥6.1bn; parent-attributable profit fell 24.2% to ¥4.0bn, and EPS was ¥15.94 versus ¥20.20.

• IFRS Q1 business profit was ¥6.7bn and net income ¥5.3bn; EPS was ¥120.1. Comprehensive income rose to ¥12.8bn from ¥7.8bn, including ¥7.3bn in valuation gains on available-for-sale securities.

• Gross margin was 12.7% versus 14.2%, and operating profit margin was 3.2% versus 4.9%.

Outlook and guidance

• FY2024 Japanese GAAP forecasts were unchanged: net sales ¥740.0bn, operating profit ¥38.3bn, ordinary profit ¥39.2bn, parent-attributable profit ¥25.2bn and EPS ¥100.87.

• Separate FY2024 IFRS forecasts included revenue of ¥745.0bn, business profit of ¥44.9bn, parent-attributable profit of ¥30.0bn and EPS of ¥120.09.

• FY2023 full-year IFRS plan included gross profit of ¥102.8bn, business profit of ¥44.9bn, operating profit of ¥38.3bn and net income of ¥30.0bn.

• Japanese GAAP forecast progress at Q1 was 21.7% for net sales, 13.5% for operating profit and 16.0% for parent-attributable profit; building order margins were expected to recover from Q2.

• Building-construction orders targeted ¥280bn at a 7% order margin; civil-engineering orders were progressing to plan, with a 10% full-year order-margin target.