T Hasegawa (4958) Q2 2024 earnings summary

Executive summary

• H1 FY24 net sales rose 6.8% YoY to ¥33,453m; operating profit increased 19.8% to ¥4,295m, and profit attributable to owners of parent rose 13.2% to ¥3,198m.

• Sales and operating profit reached 50.3% and 51.8% of FY24 plans, ahead of 10-year average progress rates of 47.7% and 46.1%.

• Higher sales and an improved cost-of-sales ratio supported profit growth despite higher SG&A, mainly from personnel expenses.

Financial highlights

• Gross profit rose 11.3% to ¥13,835m; SG&A increased 7.9% to ¥9,540m. Gross margin improved to 41.4% from 39.7%, and operating margin to 12.8% from 11.4%.

• Ordinary profit increased 22.2% to ¥4,555m; EBITDA rose 15.3% to ¥6,715m, or 20.1% of sales.

• Comprehensive income was ¥3,741m versus a ¥303m loss, reflecting a ¥762m positive currency translation adjustment versus a ¥3,288m loss in H1 FY2023.

• Foreign exchange gains were ¥10m, versus losses of ¥146m in the prior-year period; the gain on sale of investment securities declined, reducing extraordinary income.

Outlook and guidance

• FY24 forecast remains unchanged: net sales ¥66,500m, operating profit ¥8,300m, ordinary profit ¥8,800m and profit attributable to owners of parent ¥6,750m.

• FY24 EPS forecast is ¥164.05; forecast YoY changes are +2.5% in sales, +10.6% in operating profit, +7.5% in ordinary profit and +1.2% in parent-attributable profit.

• FY24 annual dividend forecast is ¥62 per share, including ¥31 for the second quarter, versus ¥61 paid for FY23.

• FY26 plan targets net sales of ¥71,500m and operating profit of ¥10,300m; planned operating margin is 14.4%, and overseas sales share is 48.1%.