Teikoku (6333) Q2 2023 earnings summary

Executive summary

• H1 FY2023 revenue rose 26.8% YoY to ¥12,909m; operating profit more than doubled to ¥2,288m, supported by pump volume, favorable FX and stronger margins.

• Full-year guidance was raised: revenue to ¥26,730m and operating profit to ¥4,480m, with pump demand and FX supporting the revision.

Financial highlights

• Gross profit was ¥5,496m, up 33.3% YoY; gross margin rose to 42.6% from 40.5%, while SG&A increased 4.8% to ¥3,207m.

• Ordinary profit rose 124.2% to ¥2,774m and net income attributable to owners rose 136.0% to ¥1,894m; FX gains increased ¥338m YoY.

• Orders reached ¥15,371m and backlog ¥13,523m, up ¥3,583m and ¥3,903m YoY, respectively; pump orders were strong in Japan, China and the US.

Outlook and guidance

• FY2023 revised forecast: revenue ¥26,730m, operating profit ¥4,480m, ordinary profit ¥5,050m and net income ¥3,520m; operating margin forecast 16.8%.

• Revised guidance exceeds initial forecasts by ¥1,990m in revenue and ¥1,540m in operating profit; H2 revenue and operating profit plans are ¥13,821m and ¥2,192m.

• Pump revenue forecast rose to ¥24,870m, including Asia ¥11,290m and Europe/Americas ¥6,720m; Japan forecast fell to ¥6,860m, ¥590m below initial plan.

• Revised average FX assumptions: $1=¥133, €1=¥137 and ¥19.5 per yuan, versus initial assumptions of ¥120, ¥130 and ¥18.0, respectively.