Tomen Devices (2737) Q2 2024 earnings summary

Executive summary

• H1 FY2024 revenue fell 17.3% YoY to ¥183,781m amid weaker PC and smartphone sales and lower memory prices; FCNT-related special losses drove a ¥4m net loss.

• Full-year guidance remained at the revised June 2023 forecast, with revenue of ¥355,000m and net income of ¥850m.

Financial highlights

• Revenue was ¥183,781m vs. ¥222,153m YoY; operating income was ¥5,703m vs. ¥7,361m.

• Ordinary income was ¥3,413m vs. ¥3,607m; net income attributable to parent shareholders was a loss of ¥4m vs. profit of ¥2,724m.

• Special gain of ¥1,658m included gains from sales of investment securities; special loss of ¥4,236m included FCNT-related bad-debt provisions and inventory valuation losses.

• Operating income declined amid foreign-exchange effects and higher SG&A; improved profit margins partially offset the pressure.

Outlook and guidance

• FY2024 revised forecast: revenue ¥355,000m, operating income ¥6,300m, ordinary income ¥4,500m and net income ¥850m; guidance was set on June 16, 2023.

• Forecast EPS is ¥124.98; the forecast includes a ¥4,200m special loss related to FCNT.

• Despite uncertainty, priorities include close customer and supplier coordination, adapting to market shifts, securing components, stable supply and optimized inventory.

• Strategic priorities include expanding server/storage NAND, automotive and Foundry/ASIC businesses, alongside marketing, digital transformation and talent development.