SMC (6273) Q1 2025 earnings summary

Executive summary

• Net sales for FY24 Q1 reached ¥202.7B, up 1.9% year-over-year, with Greater China growth offsetting weaker demand in Japan and North America.

• Operating profit declined 6.7% year-over-year to ¥52.3B due to higher cost ratios and increased SG&A expenses, but rose 27.6% sequentially.

• Net profit attributable to owners of parent fell 6.6% year-over-year to ¥48.7B, but increased 18.7% from the previous quarter.

• Comprehensive income totaled ¥108.9B, nearly flat year-over-year.

Financial highlights

• Gross profit was ¥96.7B, nearly flat year-over-year, with a gross margin of 47.7%.

• Ordinary profit decreased 8.7% year-over-year to ¥68.3B, mainly due to lower foreign exchange gains.

• Net income per share was ¥759.43, down from ¥808.49 in the prior year.

• Selling, general & administrative expenses rose 9.9% year-over-year.

• Exchange rate fluctuations contributed significantly to both sales and profit increases.

Outlook and guidance

• FY24 full-year net sales forecast is ¥840.0B, with operating profit guidance at ¥234.0B and profit attributable to owners of parent at ¥194.0B.

• No change to previously announced fiscal 2024 guidance.

• Projected annual dividend is ¥1,000 per share.

• Progress toward full-year targets stands at 24.1% for net sales and 22.4% for operating profit after Q1.