THK (6481) Q4 2024 earnings summary

Executive summary

• Consolidated revenue for FY 2024 rose 0.2% year-on-year to ¥352.7 billion, with operating income down 26.8% to ¥17.3 billion due to lower volumes, higher fixed costs, and increased investments.

• Revenue and operating income exceeded the revised plan announced in November 2024 by ¥2.7 billion and ¥0.3 billion, respectively.

• Profit attributable to owners dropped 43.3% year-over-year to ¥10.4 billion.

• New management policy targets early realization of ROE over 10%, focusing on profitability, capital efficiency, and structural reforms.

• Comprehensive income remained stable at ¥35,212 million, supported by significant foreign exchange gains.

Financial highlights

• Net sales decreased in Japan and Europe but increased in the Americas, China, and Asia, aided by a weaker yen.

• Gross margin was 23.2%, unchanged from the previous year; operating margin declined to 4.9% from 6.7%.

• Total assets reached ¥567.4 billion, up ¥11.1 billion year-on-year.

• Cash and cash equivalents at year-end were ¥138,293 million, down from ¥156,486 million; inventories rose to 3.1 months of sales.

• Profit attributable to owners was ¥10.4 billion, down 43.3% year-over-year.

Outlook and guidance

• FY2025 forecast: revenue of ¥363.5 billion (+3.0% YoY), operating income of ¥23.5 billion (+35.5% YoY), and profit attributable to owners of ¥18.0 billion (+72.4% YoY).

• Two-year period up to FY2026 defined as a structural reform phase, aiming for ROE over 10% between FY2027 and 2029.

• Interim FY2025 guidance: revenue ¥173.3 billion, profit attributable to owners ¥5.0 billion.

• Dividend policy targets DOE of 8%; FY2024 year-end dividend was ¥128.5 per share, total ¥146.5 per share.