Nippon Express (9147) Q2 2024 earnings summary

Executive summary

• Q2 FY2024 revenues rose 10.4% year-over-year to ¥1,249.9 billion, driven by global logistics recovery and the addition of cargo-partner group.

• Operating income fell 52.4% year-over-year to ¥19.2 billion, mainly due to impairment loss and lower volumes in heavy haulage and logistics.

• Profit attributable to owners of parent dropped 55.0% year-over-year to ¥11.4 billion.

• The logistics industry faced unstable demand, cost pressures from labor shortages and fuel, and direct impacts from geopolitical risks.

Financial highlights

• Q2 FY2024 consolidated segment income was ¥25.5 billion, down 39.6% year-over-year.

• Gross profit decreased 6.9% year-over-year to ¥106.1 billion, while SG&A expenses rose 12.3% to ¥80.6 billion.

• Revenues increased by ¥118.0 billion year-over-year, with significant contributions from cargo-partner and foreign exchange effects.

• Cash and cash equivalents at June 30, 2024 were ¥218.5 billion, down ¥96.6 billion from year-end 2023.

• Net cash provided by operating activities increased to ¥116.3 billion, while net cash used in investing activities rose to ¥127.7 billion due to acquisitions.

Outlook and guidance

• FY2024 revenue forecast revised upward to ¥2,570.0 billion (+14.8% year-over-year), but operating income and profit measures revised downward.

• FY2024 operating income forecast at ¥65.0 billion (+8.2% year-over-year), profit attributable to owners of parent at ¥40.0 billion.

• Basic earnings per share for FY2024 is projected at ¥461.89.

• Overseas revenues expected to rise 53.6% year-over-year, with Japan segment facing weak domestic logistics demand.