Sinfonia Technology (6507) Q2 2023 earnings summary

Executive summary

• H1 FY23 sales and profit declined YoY as semiconductor-related demand weakened; results were within expectations, while EV-related demand and defense/rocket activity showed strength.

• FY23 full-year earnings forecasts were raised from initial estimates for orders, operating profit, ordinary profit and net income, but remain below FY22 actuals.

Financial highlights

• H1 FY23 orders were ¥536.4 hundred million, down 21.8% YoY; revenue was ¥467.9 hundred million, down 4.6%.

• H1 operating profit was ¥29.2 hundred million, down 21.3%; ordinary profit was ¥33.6 hundred million, down 22.9%; net income attributable to owners was ¥23.4 hundred million, down 23.3%.

• R&D expense was ¥16.6 hundred million, down 12.4% YoY; capital expenditure was ¥38.9 hundred million, up 59.1%.

Outlook and guidance

• FY23 forecast: orders ¥1,100 hundred million, revenue ¥1,000 hundred million, operating profit ¥87 hundred million, ordinary profit ¥90 hundred million and net income ¥62 hundred million.

• Versus FY22, forecast revenue is down 8.1%, operating profit down 25.2%, ordinary profit down 25.0% and net income down 23.4%; orders are down 12.1%.

• Compared with initial forecasts, orders rose 4.8%, operating profit 8.8%, ordinary profit 12.5% and net income 10.7%; revenue remains ¥1,000 hundred million.

• Semiconductor demand recovery is expected in H2 FY24; resources, production capacity and product development are being maintained in preparation.