Teikoku (6333) Q4 2023 earnings summary

Executive summary

• FY2023 revenue and profits reached record highs, supported by higher pump sales, favorable foreign-exchange effects and improved margins.

• FY2024 guidance calls for near-flat revenue and lower operating profit, reflecting cost inflation, modest yen appreciation and a cautious second-half outlook.

Financial highlights

• Revenue rose 27.9% YoY to ¥28,450m; gross profit increased 33.4% to ¥12,073m, with gross margin up to 42.4% from 40.7%.

• Operating profit increased 101.4% to ¥5,023m; ordinary profit rose 85.3% to ¥5,472m; net income attributable to owners rose 101.1% to ¥3,996m.

• Revenue growth reflected high pump order backlog and yen weakness; pump volume and margin improvement, especially in China, lifted operating profit.

• A ¥204m gain from partial sales of policy-held shares contributed to higher net income.

Outlook and guidance

• FY2024 revenue is forecast at ¥28,190m (-0.9% YoY), operating profit at ¥4,520m (-10.0%), ordinary profit at ¥4,680m (-14.5%) and net income at ¥3,280m (-17.9%).

• First-half activity is expected to benefit from the prior-year order backlog; the second half assumes softer orders and investment appetite, particularly in Europe and the US.

• Forecast assumes average rates of ¥130/$, ¥135/€ and ¥19/Chinese yuan, versus FY2023 actuals of ¥131.6/$, ¥138.2/€ and ¥19.5/Chinese yuan.

• FY2024 planned capital investment is ¥926m; depreciation is forecast at ¥1,082m.