JAC Recruitment (2124) Q2 2024 earnings summary

Executive summary

• Revenue for 1H FY2024 rose 10.7% year-over-year to ¥19,097 million, with operating income up 4.7% and profit attributable to owners down 4.9%.

• Domestic Recruitment Business contributed about 90% of consolidated net sales, with robust demand for middle- and high-class talent despite stagnation in job mobility.

• Overseas Business faced challenging market conditions, particularly in Asia, resulting in a segment loss and impairment loss in Thailand.

• Domestic Job Offer Advertising Business saw strong growth, with revenue up 23.1% and profit up 141%.

• Both revenue and profit fell short of initial forecasts.

Financial highlights

• 1H FY2024 revenue: ¥19,097 million (+10.7% YoY); gross profit: ¥17,646 million (+10.9% YoY).

• EBITDA: ¥4,690 million (+4.7% YoY); EBITDA margin decreased to 24.6% from 26.0%.

• Ordinary income: ¥4,360 million (+4.7% YoY); profit attributable to owners: ¥2,873 million (-4.9% YoY).

• Comprehensive income: ¥3,022 million (down 4.2% YoY).

• Earnings per share: ¥17.97 for the six months ended June 30, 2024.

Outlook and guidance

• Full-year FY2024 revenue forecast revised downward to ¥39 billion (-2.6% from initial), profit forecast to ¥6 billion (-11.8% from initial).

• Deviation from initial full-year forecast expected due to lower-than-expected job placements in the first half.

• Dividend per share maintained at ¥26, with payout ratio expected around 70%.

• Continued investment in consultant hiring.

• Revenue growth is recovering but unlikely to offset 1H shortfall in 2H.