Teikoku (6333) Q3 2023 earnings summary

Executive summary

• 9M FY Mar-2023 revenue rose 29.5% YoY to ¥20,618m; operating profit increased 107.9% to ¥3,767m and net income attributable to owners rose 104.5% to ¥2,871m.

• Growth reflected higher pump sales, favorable FX and improved pump margins; the earnings outlook was unchanged from the November 2022 revision.

Financial highlights

• 9M revenue was ¥20,618m (+29.5% YoY); gross profit ¥8,826m (+37.0%); SG&A ¥5,059m (+9.3%); operating profit ¥3,767m (+107.9%).

• Ordinary profit reached ¥4,144m (+96.3% YoY), while net income attributable to owners was ¥2,871m (+104.5%).

• FX gains increased ¥123m YoY and partial sale of investment shares generated a ¥25m extraordinary gain, contributing to higher ordinary profit and net income, respectively.

Outlook and guidance

• FY Mar-2023 guidance, unchanged from the prior announcement, forecasts revenue of ¥26,730m, operating profit of ¥4,480m, ordinary profit of ¥5,050m and net income of ¥3,520m.

• Pump sales are forecast above the initial plan, supported by China and the US and favorable FX; electronic components are expected below plan amid continuing auto production cuts.

• Revised average FX assumptions: $1=¥133, €1=¥137 and ¥19.5 per yuan; US sales are expected to rise in H2 as supply-chain disruption eases, while US freight and labor costs pressure margins.

• FY pump revenue forecast is ¥24,870m, including Japan ¥6,860m, Europe/Americas ¥6,720m and Asia ¥11,290m.