SG Holdings (9143) Q4 2024 earnings summary

Executive summary

• FY2024/3 consolidated revenue was ¥1,316.9bn and operating income ¥89.2bn; both were below prior year but in line with forecast.

• FY2024 operating revenue was ¥1,434.609bn, up 9.7% YoY; operating income fell 34.1% to ¥89.204bn and net income attributable to owners fell 53.9% to ¥58.279bn.

• FY2025/3 guidance targets revenue of ¥1,380.0bn, operating income of ¥96.0bn and net income attributable to parent owners of ¥64.5bn.

Financial highlights

• FY2024/3 operating margin was 6.8% versus 9.4%; ordinary income was ¥90.8bn and net income ¥58.2bn.

• Revenue bridge: package volume reduced revenue by ¥92.7bn; unit price added ¥7.7bn, TMS reduced it by ¥24.0bn and logistics added ¥4.6bn.

• Operating income fell from ¥135.2bn to ¥89.2bn; lower revenue reduced income by ¥117.6bn, partly offset by ¥81.9bn lower outsourcing expenses.

• FY2024/3 operating cash flow was ¥77.6bn, investing cash flow -¥41.3bn and free cash flow ¥36.2bn; closing cash and deposits were ¥147.2bn.

• Basic EPS was ¥92.98 versus ¥199.56 in FY2023.

Outlook and guidance

• FY2025/3 guidance: revenue ¥1,380.0bn, operating income ¥96.0bn, operating margin 7.0%, ordinary income ¥97.0bn and net income ¥64.5bn.

• FY2025/3 H1 forecast: revenue ¥673.0bn, operating income ¥39.5bn, ordinary income ¥40.0bn and net income ¥26.0bn.

• FY2025/3 revenue outlook includes ¥26.0bn from unit price and ¥19.4bn from package volume; operating income incorporates ¥63.0bn from revenue growth, offset by higher personnel and outsourcing costs.

• Express delivery demand recovery and appropriate tariffs are expected; Expolanka is expected to benefit from expanded international transport and cost reviews, while network costs and investment continue to rise.