Noritsu Koki Co (7744) Q2 2024 earnings summary

Executive summary

• Revenue and operating profit rose year-over-year, driven by strong performance in audio equipment/peripherals and a weaker yen, with results exceeding revised forecasts from May 2024.

• Net profit surged due to operational gains and a one-time gain from the sale of PreMedica shares.

• The medical testing business was classified as discontinued operations after the transfer of PreMedica Inc. shares.

• Basic earnings per share for the first half increased to ¥321.76 from ¥124.88 year-over-year.

Financial highlights

• FY24 1-2Q revenue: ¥52,763 million, up 29.3% year-over-year; operating EBITDA: ¥14,040 million, up 76.2%; net profit: ¥11,484 million, up 157.8%.

• Operating EBITDA margin improved to 26.6% from 19.5% year-over-year.

• Gross profit for the first half increased to ¥26,365 million from ¥17,574 million year-over-year.

• Cash and cash equivalents increased to ¥95,339 million from ¥70,190 million at year-end 2023, partly due to an income tax refund.

• Total assets as of June 30, 2024, were ¥294,280 million, up from ¥279,471 million at the end of 2023.

Outlook and guidance

• Full-year forecasts revised upward: revenue now expected at ¥103,700 million (+15.2% YoY), operating EBITDA at ¥21,500 million (+21.5%), and net profit at ¥13,000 million (+27.5%).

• Basic earnings per share for the full year is forecast at ¥364.23.

• Some forex gains from 1H may reverse in 2H as the yen strengthens, but solid business progress is expected to outweigh these effects.

• Dividend payout ratio target remains at 40% or higher; dividend forecast unchanged.

• Upward revisions for Alpha Theta and JLab, downward revision for Teibow due to weak cosmetics demand.