Mitsubishi Research Institute (3636) Q3 2024 earnings summary

Executive summary

• Net sales for the first nine months of FY2024/9 decreased 6.8% year-over-year to ¥90.3 billion, mainly due to fewer large-scale projects and increased upfront investments.

• Ordinary profit declined 14.5% year-over-year to ¥8.1 billion, and operating profit dropped 15.8% to ¥7.1 billion, impacted by lower sales, higher personnel costs, and delayed monetization of new businesses.

• Profit attributable to owners of parent decreased 18.3% year-over-year to ¥4.85 billion; basic EPS was ¥306.28.

• Orders received increased year-over-year, but actual results fell short of full-year targets, prompting a downward revision of full-year forecasts.

• The company is executing its Medium-Term Management Plan 2026, focusing on DX/GX initiatives, business portfolio transformation, and expanding next-generation businesses.

Financial highlights

• Gross profit for the period was ¥20.7 billion, down 3.7% year-over-year, but gross profit margin improved by 0.7 points to 22.9%.

• Comprehensive income declined 18.5% year-over-year to ¥5.79 billion.

• Total assets increased 1.9% to ¥120.22 billion, and net assets rose 2.8% to ¥76.45 billion as of June 30, 2024.

• 9M progress rates: 78% for net sales and 93% for ordinary profit against revised full-year forecasts.

• Basic earnings per share for the nine months was ¥306.28, compared to ¥369.25 in the prior year.

Outlook and guidance

• Full-year net sales forecast revised down to ¥116.0 billion (down ¥6.1 billion year-over-year), operating profit to ¥7.5 billion (down 13.7%), ordinary profit to ¥8.8 billion (down ¥1.2 billion), and profit attributable to owners of parent to ¥5.2 billion.

• Dividend forecast for FY2024 is ¥160 per share, up from ¥150 in FY2023.

• Recovery of profitability targeted for FY2025/9 through operational improvements in TTC and accelerated business transformation in ITS.

• The company cautions that actual results may differ due to uncertainties and changing business conditions.