Tokyo Century (8439 ) Q1 2025 earnings summary

Executive summary

• Quarterly net income reached a record ¥23 billion, up 26.3% year-over-year, achieving 28.8% of the annual target and an annualized ROE of 10.1%.

• Revenues for the three months ended June 30, 2024 rose 1.6% year-over-year to ¥334.3 billion, with gross profit up 12.3% to ¥72.1 billion, mainly driven by Specialty Financing.

• Operating income increased 22.0% year-over-year to ¥34.5 billion, and ordinary income rose 20.2% to ¥38.2 billion.

• Comprehensive income surged 220.9% year-over-year to ¥89.4 billion, reflecting significant translation adjustments.

• Specialty Financing and Automobility segments were primary drivers of income growth, while Environmental Infrastructure saw a decline due to the absence of prior one-time gains.

Financial highlights

• Net income attributable to owners of parent rose 26.3% YoY to ¥23.0 billion; EPS increased to ¥46.98 after a 4-for-1 stock split.

• Ordinary income grew 20.2% YoY to ¥38.2 billion; gross profit up 12.3% YoY to ¥72.1 billion.

• Shareholders’ equity ratio improved to 14.1%; segment assets increased by ¥220.8 billion from the previous fiscal year-end.

• Total assets as of June 30, 2024 were ¥6,685.2 billion, up 3.5% from March 31, 2024.

• Interest-bearing debt increased 4.2% to ¥4,946.2 billion from the previous fiscal year-end.

Outlook and guidance

• Progress toward the annual net income target of ¥80 billion is ahead of plan at 28.8%.

• Full-year forecast for ordinary income is ¥125.0 billion (up 6.6% YoY), and net income attributable to owners of parent is projected at ¥80.0 billion (up 10.9%).

• Annual dividend forecast is ¥58.00 per share, reflecting the stock split.

• Specialty Financing, especially ACG, is expected to continue strong performance, with income concentration in the second half due to aircraft sale timing.

• Environmental Infrastructure aims to recover by replacing assets with more profitable ones.