Sumitomo Heavy Industries (6302) Q4 2024 earnings summary

Executive summary

• FY2024 saw declines in orders, net sales, and operating profit year-over-year, impacted by weak demand in hydraulic excavators and semiconductor-related products, and extraordinary losses from European operations.

• Net sales for FY2024 were JPY1,071.1 billion, down 1% year-over-year; operating profit fell 26% to JPY55.1 billion; ordinary profit dropped 30% to JPY49.2 billion; profit attributable to owners of parent declined 76% to JPY7.7 billion due to a JPY27.5 billion extraordinary loss from impairment, mainly related to Lafert S.p.A.

• Orders received decreased 7% year-over-year to JPY936.1 billion, reflecting weaker demand in key segments and regions.

• The Medium-Term Management Plan 2026 (MTMP26) targets were revised downward due to underperformance and adverse market conditions, with a renewed focus on profitability and capital efficiency.

• ROIC ended at 4.8% for the year.

Financial highlights

• Orders: JPY936.1 billion, down JPY72.5 billion year-over-year.

• Net sales: JPY1,071.1 billion, down JPY10.4 billion year-over-year.

• Operating profit: JPY55.1 billion, down JPY19.3 billion year-over-year; operating profit ratio fell to 5.1%.

• Ordinary profit: JPY49.2 billion, down JPY21.1 billion year-over-year.

• Comprehensive income was JPY44.7 billion, down 30% year-over-year.

• Dividend for FY2024 set at JPY125 per share; same forecast for FY2025.

Outlook and guidance

• FY2025 forecast: Orders JPY1,130.0 billion (+193.9 billion), net sales JPY1,090.0 billion (+18.9 billion), operating profit JPY60.0 billion (+4.9 billion), current profit JPY28.0 billion (+20.3 billion).

• Operating profit ratio expected to improve to 5.5%; ROIC to 5.0%.

• All segments except Energy & Lifeline are expected to see sales growth, with market recovery in hydraulic excavators and semiconductors.

• Dividend per share maintained at JPY125.