Weathernews (4825) Q2 2023 earnings summary

Executive summary

• H1 FY2023 net sales rose 6.2% YoY to ¥10,486M; operating profit increased 10.6% to ¥1,271M and net income rose 26.0% to ¥921M.

• App-user growth, stronger subscriptions and advertising, and aviation recovery supported sales; freight weakness and lower one-time revenue weighed on some areas.

Financial highlights

• Ordinary profit rose 16.1% YoY to ¥1,310M; comprehensive income increased to ¥1,063M from ¥766M.

• Gross profit was ¥4,636M versus ¥4,342M YoY; SG&A increased to ¥3,364M from ¥3,192M.

• H1 operating margin improved 0.5 points YoY to 12.1%; Q2 alone sales rose 7.6% to ¥5,261M and operating profit rose 28.1% to ¥799M, with margin up 2.4 points to 15.2%.

• Prior-year results included ¥78.8M impairment losses and ¥3.3M subsidiary-liquidation loss; neither item recurred in H1 FY2023.

Outlook and guidance

• FY2023 guidance remained unchanged: net sales ¥21,000M, operating profit ¥3,200M, ordinary profit ¥3,300M and net income ¥2,400M.

• Growth drivers include mobile/internet subscriptions and advertising, Sea Planning NAR services, gradual airline recovery and continued helicopter-market growth.

• Advertising and overseas promotion investments continue alongside software-development streamlining; foreign exchange and global conditions will be monitored.