Nabtesco (6268) Q2 2024 earnings summary

Executive summary

• First half FY2024 net sales declined 6.4% year-on-year to ¥152.5 billion, with operating profit down 26.0% to ¥6.4 billion and net profit at ¥4.2 billion, mainly due to weak demand in Component Solutions and an impairment loss in Europe.

• Despite lower sales and profits year-on-year, results exceeded plan due to cost controls and price pass-throughs.

• Full-year forecast remains unchanged at ¥323.7 billion sales and ¥13.5 billion operating profit, with segment-level adjustments and slower recovery in Precision Reduction Gears.

• Interim dividend set at ¥40 per share; full-year dividend forecast at ¥80 per share.

• Component Solutions saw significant declines due to weak robotic and EV demand, while Transport and Accessibility Solutions experienced growth.

Financial highlights

• Operating profit margin for the first half was 4.2%, down from 5.3% year-on-year.

• Net profit for the first half was ¥4.2 billion; basic EPS at ¥35.01.

• Assets increased to ¥433.3 billion, mainly from higher inventories, new plant operations, and yen depreciation.

• Borrowings rose to ¥31.8 billion; equity ratio at 61.9%.

• Overseas sales ratio rose to 51.0%, with Japan at 49.0%, Europe 20.0%, China 13.6%, and North America 8.9%.

Outlook and guidance

• Full-year sales and operating profit forecasts unchanged, with segment-level revisions: Component Solutions and Others lowered, Transport and Accessibility Solutions raised.

• Market recovery for precision reduction gears now expected from the first half of 2025, not the second half of 2024.

• Profitability improvement plan targets margin gains through cost reduction, price pass-through, and productivity initiatives.

• Accessibility Solutions segment expected to exceed ¥100 billion in annual sales for the first time.

• Strong demand anticipated in automatic doors and platform doors, with continued weakness in EV-related components.