Seibu Giken (6223) Q3 2024 earnings summary

Executive summary

• Net sales for Q3 FY12/24 rose to JPY 23,401 mn (15.3% YoY), but operating profit fell to JPY 2,917 mn (10.0% YoY) due to lower high-margin sales in China.

• Growth in shipments to EV battery plants in Japan and Europe offset weak China demand.

• Profit attributable to owners of parent declined 6.3% YoY to JPY 2,444 mn.

Financial highlights

• Net sales: JPY 23,401 mn (+15.3% YoY); operating profit: JPY 2,917 mn (-10.0% YoY); net profit: JPY 2,444 mn (-6.2% YoY).

• Gross profit margin declined to 34.0% from 40.9% YoY; EBITDA margin at 15.4%.

• Q3 sales by product: Desiccant dehumidifier JPY 15,088 mn (+13.9% YoY), VOC concentrator JPY 6,291 mn (+23.8% YoY).

• Regional sales: Japan +115.1% YoY, Europe +129.2% YoY, China -49.3% YoY.

• Order intake for Q3: JPY 22,164 mn (-7.0% YoY); order backlog: JPY 16,792 mn (-6.3% from previous year-end).

Outlook and guidance

• FY12/24 guidance unchanged: net sales JPY 33,417 mn (+16.3% YoY), operating profit JPY 4,434 mn (+3.2% YoY), net profit JPY 3,660 mn (+6.7% YoY).

• Basic earnings per share for the full year is forecast at JPY 178.58.

• Strong orders for EV battery manufacturing plants in Europe, Japan, and North America expected to drive growth.

• Annual dividend forecast at JPY 70 per share, targeting a 40% payout ratio.

• Risks include potential delays in large order deliveries and lower-than-expected Q4 project bookings.