Sun Frontier Fudousan (8934) Q3 2024 earnings summary

Executive summary

• 9M FY2024/3 net sales fell 17.4% YoY to ¥62,258m; operating profit fell 3.6% to ¥14,163m and parent-attributable profit fell 5.9% to ¥9,744m.

• Lower Real Estate Revitalization sales reflected comparison with prior-year large property transactions and hotel sales.

• Real Estate Service and Hotel and Tourism segment profits grew, partly offsetting lower Real Estate Revitalization profit.

• FY2024/3 operating, ordinary and net profit forecasts and the dividend forecast were raised; the sales forecast was reduced.

Financial highlights

• Gross profit was ¥20,620m, up 0.7% YoY; SG&A rose 11.6% to ¥6,457m, in line with planned human-capital and systems investment.

• Operating profit was ¥14,163m, down 3.6%, with a 22.7% margin; ordinary profit was ¥13,902m, down 3.5%.

• Parent-attributable profit was ¥9,744m, down 5.9%, with a 15.7% margin; EPS was ¥200.76 versus ¥213.05.

• Comprehensive income was ¥10,450m, down 6.6% YoY.

Outlook and guidance

• FY2024/3 forecast: sales ¥79,000m (-4.6% YoY), operating profit ¥16,700m (+12.0%), ordinary profit ¥16,500m (+12.1%) and parent-attributable profit ¥11,600m (-0.1%).

• Forecast EPS is ¥238.99; full-year dividend forecast rose ¥4 to ¥56 per share, including ¥26 interim and ¥30 year-end (¥28 ordinary and ¥2 commemorative).

• FY25 targets: sales ¥100bn, ordinary profit ¥20bn, net profit ¥14bn, equity ratio ~50% and ROE above 10%.