Mitsubishi Research Institute (3636) Q1 2025 earnings summary

Executive summary

• Net sales for the three months ended December 31, 2024, were ¥27,706 million, up 0.1% year-over-year, with ordinary profit down due to unprofitable ITS projects and higher expenses.

• The business environment was marked by global economic growth, easing inflation in the US and Europe, and policy uncertainties, while Japan saw moderate recovery and increased capital expenditure for DX and GX initiatives.

• The company is in the second year of its Medium-Term Management Plan 2026, focusing on growth in DX, profitability improvements, and business portfolio transformation.

• Sales from general industries grew in both TTC and ITS segments, offsetting declines elsewhere.

• No change in full-year forecasts as of 1Q; order-taking activities are being bolstered.

Financial highlights

• Net sales: ¥27,706 million (+0.1% YoY); gross profit: ¥6,432 million (+1.2% YoY).

• Operating profit: ¥1,480 million (-27.3% YoY); ordinary profit: ¥1,938 million (-20.5% YoY); profit attributable to owners: ¥991 million (-15.9% YoY).

• Gross profit margin improved to 23.2% (+0.2pt YoY); operating profit margin declined to 5.3% (-2.1pt YoY).

• Comprehensive income for the quarter was ¥1,191 million, down 20.8% year-over-year.

• Total assets at quarter-end were ¥117,900 million, down 1.5% from the previous fiscal year-end; net assets decreased to ¥76,158 million, mainly due to dividend payments and treasury share cancellation.

Outlook and guidance

• FY2025 full-year forecast unchanged: net sales ¥128 billion (+11.0% YoY), operating profit ¥8.3 billion (+17.5% YoY), ordinary profit ¥9.5 billion (+16.6% YoY), profit attributable to owners ¥5.6 billion (+11.9% YoY), EPS ¥355.76 (+12.4% YoY).

• 1Q progress rates: 21.6% for net sales, 20.4% for ordinary profit—lowest since adopting sales progress standards.

• Annual dividend forecast is ¥160 per share, unchanged from the previous year.