Nihon Kohden Corporation (6849) Q2 2025 earnings summary

Executive summary

• First half FY2024 consolidated sales were ¥102.8 billion, down 0.7% year-over-year, with domestic sales up 0.8% and overseas sales down 3.4%.

• Operating income declined 31.7% year-over-year to ¥5.1 billion, with ordinary income dropping 82.9% to ¥2.1 billion due to foreign exchange losses.

• Net income attributable to owners of parent fell 94.2% to ¥463 million, impacted by extraordinary losses and business restructuring costs.

• Domestic sales rose due to increased consumables and services, while overseas sales declined mainly from lower sales in Asia and U.S. subsidiary reorganization.

• Extraordinary losses, including business restructuring in China, and foreign exchange losses significantly impacted profitability.

Financial highlights

• Gross profit margin was 50.5%, nearly flat year-over-year, with gross profit at ¥51,906 million.

• SG&A expenses increased to ¥46.7 billion, raising the SG&A ratio to 45.5%.

• Equity ratio improved to 80.7% from 77.6% at the previous fiscal year-end.

• Free cash flow for the first half was ¥4.5 billion, down ¥2.1 billion year-over-year.

• Cash and cash equivalents at period-end were ¥48,692 million, down ¥1,185 million from March 31, 2024.

Outlook and guidance

• FY2024 sales forecast revised to ¥227 billion (+2.3% YoY), with domestic sales at ¥147 billion and overseas sales at ¥80 billion.

• Operating income forecast lowered to ¥20.5 billion (down from ¥23 billion), with net income guidance at ¥12 billion.

• Overseas sales forecast lowered due to continued weakness in Asia and AED inventory adjustments; North America expected to see growth in patient monitors and ventilators.

• AED unit shipments in Japan revised upward to 60,000 units for FY2024.

• Recovery in sales and income anticipated in the second half, but not enough to offset first-half declines.