Weathernews (4825) Q2 2024 earnings summary

Executive summary

• H1 net sales rose 6.3% YoY to ¥11,150M; operating profit fell 0.7% to ¥1,263M, while attributable profit increased 10.4% to ¥1,018M.

• Mobile/internet and several BtoB services offset weaker Sky Planning revenue and higher personnel, cloud, and one-time outsourcing costs.

Financial highlights

• H1 ordinary profit was ¥1,284M, down 2.0% YoY; operating margin fell 0.8pt to 11.3%.

• Q2 net sales rose 5.9% YoY to ¥5,570M; operating profit increased 6.1% to ¥847M, with a 15.2% margin.

• Q2 attributable profit increased 6.7% to ¥589M; EPS rose ¥3.2 to ¥53.4.

• H1 basic EPS was ¥92.28 and diluted EPS ¥92.04; comprehensive income was ¥1,123M, up from ¥1,063M.

• Lower total income taxes, including deferred tax effects from the mandatory retirement system introduced in Q1, supported H1 net income growth.

Outlook and guidance

• FY2024.5 guidance remains unchanged: net sales ¥22,500M (+6.6%), operating and ordinary profit ¥3,500M each (+7.5% and +6.6%), and attributable profit ¥2,500M (+4.3%).

• Forecast operating margin is 15.6% (+0.2pt); EPS is ¥226.5 (+¥8.8) and ROE is 13.2% (-0.5pt).

• Growth plans center on Mobile subscriptions and advertising, existing BtoB services, and SaaS expansion; investment will continue in advertising, overseas talent, data, and cloud computing.

• FY2024 annual dividend forecast remains ¥120 per share.