Sun Frontier Fudousan (8934) Q2 2024 earnings summary

Executive summary

• 1H FY2024/3 net sales rose 38.7% YoY to ¥48,998 million, operating profit rose 49.4% to ¥12,022 million and attributable net income rose 57.7% to ¥8,463 million.

• Office property sales advanced ahead of plan and recovering domestic and inbound tourism supported hotel demand; FY2024/3 forecasts were unchanged.

Financial highlights

• Gross profit increased 38.7% YoY to ¥16,357 million; SG&A rose 15.5% to ¥4,334 million, reflecting planned investment in people and systems.

• Ordinary profit reached ¥11,944 million, up 48.7%; EPS was ¥174.39 vs. ¥110.44, and comprehensive income was ¥9,032 million vs. ¥5,943 million.

• Cash and deposits increased ¥5,094 million from March 2023 to ¥47,110 million; inventories rose ¥2,147 million to ¥82,329 million.

Outlook and guidance

• FY2024/3 forecast unchanged: net sales ¥83,000 million, operating profit ¥16,500 million, ordinary profit ¥16,000 million, attributable net income ¥11,000 million and EPS ¥226.66.

• 1H progress against full-year forecasts was 59.0% for net sales, 74.7% for ordinary profit and 76.9% for net income.

• FY2025/3 medium-term targets: net sales ¥100 billion, ordinary profit ¥20 billion and net income ¥14 billion; strategy includes a 10,000-room hotel target in 10 years.

• Growth priorities include expanding revitalization and service businesses, scaling hotel operations and development, faster office acquisitions and commercialization, and M&A.