NEC Networks & System Integration (1973) Q2 2025 earnings summary

Executive summary

• Achieved record high orders, net sales, and operating income for the first half of FY2025 compared to the same period last year, with net sales rising 10.9% year-over-year to ¥172,040 million, operating income up 25.8% to ¥7,832 million, and net income attributable to owners up 6.9% to ¥3,848 million.

• Comprehensive income increased 20.3% year-over-year to ¥4,337 million for the first half.

• Free cash flow improved significantly, rising by ¥15.5 billion to ¥24.6 billion.

Financial highlights

• Gross profit increased by ¥2.2 billion to ¥31.2 billion, though gross margin declined by 0.6pt to 18.1%.

• Operating income margin improved by 0.6pt to 4.6%, with operating income at ¥7,832 million versus ¥6,224 million a year earlier.

• Orders backlog rose 8% year-over-year to ¥256.9 billion.

• Net assets as of September 30, 2024, were ¥158,053 million, with an owner's equity ratio of 55.0%.

• Cash and cash equivalents increased to ¥93,709 million at the end of the period.

Outlook and guidance

• Full-year forecasts as of October 29, 2024, project orders received of ¥380 billion (+1%), net sales of ¥365 billion (+2%), operating income of ¥29.0 billion (+3.9), and net income of ¥18.0 billion (+2.7).

• Interim dividend set at ¥28.00 per share, with full-year dividend forecast at ¥56.00 per share.

• No change from initial forecasts.