Takasago Thermal Engineering (1969) Q1 2025 earnings summary

Executive summary

• Net sales for 1Q FY2024 were ¥70,415 million, down 10% year-over-year due to fewer large industrial projects completed, but gross profit and margin reached record highs.

• Orders received increased 13.8% year-over-year to ¥100,574 million, with the order backlog at a record high, reflecting strong demand and systematic sales activities, especially in industrial systems and overseas markets.

• Profitability improved at subsidiaries in Japan and overseas, with international sales up 27.7% and orders up 140.1% year-over-year.

• Profit attributable to owners of parent increased 2.8% year-over-year to ¥2,027 million, despite higher SG&A expenses.

Financial highlights

• 1Q FY2024 net sales: ¥70,415M (down 10.0% YoY); gross profit: ¥10,103M (up 3.9% YoY, margin 14.3%).

• Operating profit: ¥1,897M (down 18.2% YoY, margin 2.7%); ordinary profit: ¥2,910M (down 6.6% YoY, margin 4.1%).

• Net profit: ¥2,027M (up 2.8% YoY, margin 2.9%); earnings per share: ¥30.55 (up from ¥29.77 YoY).

• Orders received: ¥100,574M (+13.8% YoY); order backlog: ¥371,114M (+18.6% YoY).

• Overseas orders and sales surged, especially in China and Southeast Asia.

Outlook and guidance

• FY2024 forecast: net sales ¥370,000M (+1.8% YoY), operating profit ¥25,700M, net profit ¥21,400M (up 5.2% YoY), and annual dividend ¥130/share.

• Orders expected to decrease 9.5% YoY to ¥365,000M due to a high prior-year base.

• Dividend forecast: ¥130/share (¥65 interim, ¥65 year-end), targeting a 40% payout ratio.