PCI Holdings (3918) Q3 2024 earnings summary

Executive summary

• Net sales and profits declined year-over-year, with net sales for the year at ¥25,084 million, down 12.0%, and operating profit at ¥1,054 million, down 38.3%.

• Profit attributable to owners of parent fell 18.9% to ¥817 million, and comprehensive income dropped to ¥719 million.

• Sales in the Engineering Business grew, but Product/Device and ICT Solution Businesses saw declines, partly due to reduced low-profit projects and the exclusion of leafnet Co. Ltd.

• Operating income dropped sharply, mainly due to increased SG&A expenses and the impact of leafnet Co. Ltd.

Financial highlights

• Gross profit declined to ¥5,736 million from ¥6,935 million year-over-year, and gross profit margin decreased from 25.0% to 23.1%.

• Ordinary profit decreased 44.9% to ¥978 million.

• Basic earnings per share were ¥82.34, down from ¥100.09 year-over-year.

• Total assets decreased to ¥15,503 million from ¥17,627 million, while net assets increased slightly to ¥9,251 million.

• EBITDA for Q3 FY9/2024 was ¥943 million, down from ¥1,572 million the previous year.

Outlook and guidance

• Full-year FY9/2024 forecast was revised downward, with net sales expected at ¥25,300 million, operating profit at ¥1,030 million, ordinary income at ¥935 million, and net profit at ¥770 million.

• For the six months ending March 31, 2025, net sales are forecast at ¥12,700 million, operating profit at ¥590 million, and profit attributable to owners at ¥365 million.

• Fiscal year-end will change from September 30 to March 31, subject to shareholder approval.

• Decline in hardware sales and higher labor/outsourcing costs cited as main reasons for revision.

• Gains on stock transfers expected to partially offset lower profits.