Sekisui House (1928) Q2 2025 earnings summary

Executive summary

• Net sales and operating profit for 2Q FY2024 reached record highs, with net sales rising 27.1% year-over-year to ¥1,859,127 million and operating profit up 25.8% to ¥157,141 million, driven by domestic and overseas expansion and the consolidation of M.D.C. Holdings in April 2024.

• The acquisition of M.D.C. Holdings, Inc. in the U.S. expanded the overseas business, significantly boosting overseas sales and profit.

• FY2024 plan was revised upward, with net sales expected to reach ¥4 trillion for the first time, reflecting strong U.S. homebuilding and urban redevelopment.

• Segment reclassification moved some subsidiaries from "Other businesses" to "Urban redevelopment," affecting year-over-year comparisons.

• Temporary extraordinary losses are expected from the MDC acquisition, but profit and dividend forecasts remain unchanged.

Financial highlights

• FY2024 net sales revised to ¥4,000,000 million (28.7% increase year-over-year); operating profit revised to ¥320,000 million (18.1% increase); ordinary profit to ¥288,000 million (7.4% increase); profit attributable to owners of parent to ¥209,000 million (3.3% increase).

• 2Q FY2024 net sales: ¥1,859.1 bn; operating profit: ¥124.9 bn; operating margin: 8.5%.

• Ordinary profit increased 17.5% year-over-year to ¥147,176 million; comprehensive income surged 51.0% to ¥239,861 million.

• EPS forecast at ¥322.56; ROE at 11.7%; ROA at 8.2%; annual dividend per share at ¥129 (payout ratio 40%).

• Total assets grew to ¥4,720,306 million, up from ¥3,352,798 million as of January 31, 2024; net assets increased to ¥1,997,595 million, with an equity capital ratio of 41.3%.

Outlook and guidance

• FY2024 plan revised upward due to strong U.S. homebuilding and urban redevelopment; net sales and operating profit targets increased.

• Costs related to MDC acquisition (approx. ¥14 bn) to be recorded as extraordinary losses; PPA impact for next year expected to be less than initial estimates.

• Dividend forecast for FY2024 is ¥129.00 per share, up from ¥123.00 in FY2023; no share repurchases planned for FY2024.