KATITAS (8919) Q2 2025 earnings summary

Executive summary

• Net sales for 1H FY2024 rose 3.2% YoY to ¥64,010 million, with operating profit up 16.6% to ¥6,820 million and profit attributable to owners of parent up 13.6% to ¥4,535 million, driven by strong demand for affordable homes and increased properties sold.

• Gross profit margin improved by 1.4–1.5pt YoY, and operating profit margin rose, supported by higher gross profit per property and effective cost controls.

• Inventory shortages at the start of 2Q were resolved, with properties purchased up 17.5% YoY and inventory levels rebounding.

• Adjusted operating profit for 1H FY2024 was ¥7,833 million (+13.6% YoY), with adjusted net income at ¥5,235 million (+12.7% YoY).

• No material developments in the ongoing consumption tax lawsuit; any negative ruling is not expected to impact operating profit due to prior special loss recognition.

Financial highlights

• 1H FY2024 net sales: ¥64,010 million (+3.2% YoY); operating profit: ¥6,820 million (+16.6% YoY); ordinary profit: ¥6,656 million (+16.2% YoY); 3,676 properties sold (+5.5% YoY).

• Adjusted operating profit: ¥7,833 million (+13.6% YoY); adjusted profit attributable to owners of parent: ¥5,235 million (+12.7% YoY).

• EPS for 1H FY2024: ¥58.08 (+13.1% YoY); adjusted EPS: ¥67.04 (+12.2% YoY).

• Cash and deposits increased to ¥22,289 million; shareholders' equity rose to ¥42,891 million; equity-to-asset ratio at 54.7%.

• Dividend forecast for FY2024 is ¥56.0 per share, targeting a payout ratio of at least 40% based on adjusted net income.

Outlook and guidance

• FY2024 full-year guidance: net sales ¥134,500 million (+6.1% YoY), operating profit ¥14,000 million (+10.5% YoY), adjusted operating profit ¥16,200 million (+9.8% YoY), profit attributable to owners of parent ¥9,400 million (+10.6% YoY), basic EPS ¥120.56.

• Management expects continued strong demand for low-priced homes, with gross profit per property projected to remain high and inventory levels stable.

• REPRICE is expected to benefit from reduced competition from new builds and rising new house construction costs, supporting margin recovery.

• Impact from rising interest rates is expected to be neutral, as most buyers use variable-rate mortgages and may shift from new builds to pre-owned homes.

• No changes to previously announced full-year guidance.