Mitsubishi Research Institute (3636) Q4 2024 earnings summary

Executive summary

• Net sales declined 5.5% year-over-year to ¥115.4 billion, mainly due to a decrease in major ITS projects and the conclusion of large TTC projects from the previous year.

• Operating profit fell 18.7% year-over-year to ¥7.1 billion, impacted by lower sales, growth investments, and higher personnel costs.

• Profit attributable to owners was ¥5.0 billion, down 20.4% year-over-year.

• Results were below revised forecasts, partly due to delayed sales recognition, increased costs in ITS, and delays in monetizing new businesses.

• The first year of the Medium-Term Management Plan 2026 focused on scaling up DX business, improving profitability, and transforming the business portfolio.

Financial highlights

• Net sales: ¥115.4 billion (down ¥6.8 billion, -5.5% year-over-year).

• Operating profit: ¥7.1 billion (down ¥1.6 billion, -18.7% year-over-year).

• Ordinary profit: ¥8.1 billion (down ¥1.85 billion, -18.5% year-over-year).

• Profit attributable to owners: ¥5.0 billion (down ¥1.3 billion, -20.4% year-over-year).

• Basic EPS: ¥316.44 (down ¥75.83 year-over-year).

• Gross profit was ¥25,419 million, with a gross margin of 22.0% (up 0.7p year-over-year).

• Comprehensive income was ¥5,719 million, down 27.0% year-over-year.

• Cash and cash equivalents at year-end increased to ¥30,627 million, up ¥5,700 million from the previous year.

• Equity-to-asset ratio improved to 56.5%.

Outlook and guidance

• FY2025/9 net sales forecast: ¥128.0 billion (+11.0% year-over-year).

• Operating profit forecast: ¥8.3 billion (+17.5% year-over-year).

• Ordinary profit forecast: ¥9.5 billion (+16.6% year-over-year).

• Profit attributable to owners forecast: ¥5.6 billion (+11.9% year-over-year).

• Think Tank & Consulting Services segment expects net sales of ¥50.0 billion (+10.1%) and ordinary profit of ¥5.3 billion (+25.1%). IT Services segment forecasts net sales of ¥78.0 billion (+11.5%) and ordinary profit of ¥4.2 billion (+7.4%).

• ROE expected to rise to 8.1%.

• Annual dividend forecast maintained at ¥160 per share.