Nippon Sanso (4091) Q1 2025 earnings summary

Executive summary

• Q1 FYE2025 revenue increased 6.6% year-over-year to ¥329.2 billion, with core operating income up 18.7% to ¥48.3 billion and net income attributable to owners up 18.4% to ¥29.0 billion, driven by price management, productivity gains, and FX tailwinds.

• The company is advancing its NS Vision 2026 plan, focusing on productivity, price management, capital investment, and diversity, with a revised management structure and director compensation system linked to ROCE and GHG reduction.

• Acquisition of Kleenheat's LPG business in Australia is pending regulatory approval, expected to expand the LPG supply network and geographic footprint.

• Board diversity has been enhanced, and director remuneration now aligns with financial and non-financial KPIs.

• Profit growth was achieved despite global inflation, JPY depreciation, and softness in the semiconductor market.

Financial highlights

• Q1 revenue: ¥329.2 billion (+6.6% YoY); core operating income: ¥48.3 billion (+18.7% YoY); net income attributable to owners: ¥29.0 billion (+18.4% YoY).

• Core operating income margin rose to 14.7%; EBITDA margin reached 23.6%.

• Free cash flow was negative at -¥12.0 billion, down from ¥8.6 billion in the prior year; operating cash flow increased 1.6% YoY.

• Adjusted net D/E ratio improved to 0.73x; interest-bearing liabilities increased to ¥981.6 billion.

• Basic EPS for Q1 FYE2025 was ¥67.19; ROE at 12.9%, ROCE after tax at 6.7%.

Outlook and guidance

• Full-year FYE2025 revenue forecast at ¥1,300.0 billion (+3.6% YoY), core operating income at ¥177.0 billion (+6.6%), and net income attributable to owners at ¥105.0 billion (-0.9%).

• Core operating income margin expected at 13.6%; EBITDA margin at 22.4%.

• Guidance maintained with upside possible if FX and market conditions remain stable; Q2 expected to be similar to Q1.