Nippon Electric Glass (5214) Q2 2024 earnings summary

Executive summary

• Net sales for 2Q FY2024 reached ¥154.7 billion, up 11.2% year-over-year, with all profit metrics turning positive from losses in the prior year, driven by strong display and semiconductor demand.

• Profit attributable to owners reached ¥30.2 billion, reversing a ¥15.7 billion loss year-over-year.

• Extraordinary gains included ¥22.9 billion from the sale of non-current assets and ¥8.7 billion from investment securities, significantly boosting net profit.

• The business environment remains challenging due to high raw material, energy, and logistics costs, and fierce competition, especially in automotive composites.

• Comprehensive income surged to ¥53.9 billion from a loss of ¥5.1 billion in the prior year.

Financial highlights

• Operating profit was ¥2.9 billion, compared to a ¥5.7 billion loss in the same period last year.

• Operating margin improved to 1.9% for 2Q FY2024 from -4.1% a year earlier.

• Ordinary profit reached ¥10.3 billion, up from a ¥3.1 billion loss year-over-year.

• Earnings per share for 2Q FY2024 accumulated to ¥347.08, compared to -¥168.85 in the prior year.

• Free cash flow for 2Q FY2024 was ¥25.8 billion, up from a ¥14.1 billion in 2Q FY2023.

Outlook and guidance

• Full-year FY2024 net sales forecast is ¥310.0 billion, up 10.7% from FY2023.

• Operating profit is projected at ¥5.0 billion, with profit attributable to owners at ¥30.0 billion.

• Dividend forecast raised to ¥130 per share for FY2024.

• The company expects continued challenges from economic slowdown in China and high costs but aims to improve profitability through price revisions and productivity gains.

• Full-year operating profit guidance was revised down from ¥16.0 billion to ¥5.0 billion.