Nippon Express (9147) Q4 2024 earnings summary

Executive summary

• FY2024 revenue increased 15.1% year-over-year to ¥2,577.6 billion, driven by global logistics recovery and the addition of cargo-partner, but profitability declined due to higher labor and energy costs and reduced pandemic-related volumes.

• Net income attributable to owners fell 14.4% year-over-year to ¥31.7 billion.

• Q4 operating profit rose due to the absence of prior-year impairment losses and a reversal of accrued paid leave liabilities, despite ongoing challenges in the domestic pharmaceutical business.

• The company is focusing on restructuring, asset replacement, and strengthening its business portfolio, launching the "Dynamic Growth 2.0" mid-term plan for global expansion and sustainability.

Financial highlights

• Operating profit declined 18.3% year-over-year to ¥49.0 billion, with business profit down 21.7% to ¥63.5 billion due to higher labor costs and lower handling of infectious disease-related supplies.

• Q4 revenue increased 20.2% year-over-year; Q4 net profit nearly doubled sequentially from Q3.

• Dividend payout ratio for FY2024 is 82.3%, with a total return ratio of 113.6% and a planned 3-for-1 stock split effective January 2025.

• Impairment losses included ¥6.5 billion from the transfer of a special combined delivery business and ¥2.9 billion in the domestic pharmaceutical segment.

Outlook and guidance

• FY2025 revenue forecast is ¥2,700.0 billion (+4.7% YoY), with operating profit expected to rise 63.0% to ¥80.0 billion and net profit to ¥55.0 billion (+73.3%).

• Segment profit growth is expected in all regions, especially Europe (+45.8%) and East Asia (+32.4%).

• Annual dividend forecast for FY2025 is ¥100 per share, with a share buyback of up to ¥50 billion planned.

• Management anticipates moderate logistics demand recovery amid ongoing geopolitical and economic uncertainties.