KFC (3420) Q4 2023 earnings summary

Executive summary

• FY2023 revenue was ¥22,627 million, down 12.8% YoY; ordinary income was ¥1,396 million, down 46.3%, amid delayed projects, lower large-project volumes and higher input costs.

• Tunnel materials maintained strong market positioning, including a nationwide share above 60% for waterproof sheets, while the business mix faced fewer new tunnel projects and delayed deliveries.

Financial highlights

• Consolidated revenue fell ¥3,330 million YoY to ¥22,627 million; segment revenue was ¥7,077 million in Fastener, ¥6,779 million in Civil Engineering Materials and ¥8,770 million in Construction.

• Consolidated ordinary income declined ¥1,203 million YoY to ¥1,396 million; segment ordinary income was ¥589 million in Fastener, ¥65 million in Civil Engineering Materials and ¥741 million in Construction.

• Operating cash flow was ¥3,750 million, investing cash flow was negative ¥958 million and free cash flow was ¥2,792 million; ending cash and cash equivalents were ¥5,989 million.

Outlook and guidance

• FY2024 revenue is forecast at ¥25,000 million, up 10.5% YoY; ordinary income is forecast at ¥1,450 million, up 3.9%.

• FY2024 segment revenue forecasts: Fastener ¥8,800 million (+24.3%), Civil Engineering Materials ¥7,300 million (+7.7%) and Construction ¥8,900 million (+1.5%).

• FY2024 segment ordinary income forecasts: Fastener ¥840 million (+42.5%), Civil Engineering Materials ¥150 million (+130.1%) and Construction ¥460 million (-38.0%).

• Growth plans emphasize higher-value products, tunnel repair work, supplementary construction methods and stronger prime-contracting and infrastructure-renewal orders.