World Holdings (2429) Q2 2024 earnings summary

Executive summary

• Net sales rose 22.5% year-over-year to ¥110.8 billion, exceeding plan by 1.1%, but operating profit fell 36.0% to ¥2.36 billion due to semiconductor sector stagnation and fewer real estate sales.

• Profits exceeded internal plans, driven by cost controls in Human Resources and Education, higher rental income in Real Estate, and strong growth in Services Human Resources.

• Profit attributable to owners dropped 63.4% to ¥737 million, yet exceeded plan by 190.4%.

• All segments faced challenging market conditions, with notable profit declines in Manufacturing and Real Estate, but strong growth in Services Human Resources.

• Services Human Resources and Agricultural Park businesses delivered strong YoY growth, with logistics, new park contracts, and full-year inclusion of Yamato Staff Supply contributing.

Financial highlights

• Net sales: ¥110.8 billion (+22.5% YoY), operating profit: ¥2.36 billion (-36.0% YoY), ordinary profit: ¥2.38 billion (-34.7% YoY), profit attributable to owners: ¥737 million (-63.4% YoY).

• Gross profit increased to ¥16,701 million from ¥15,786 million year-over-year.

• Net income per share was ¥41.83, down from ¥114.79 a year earlier.

• Comprehensive income fell 55.4% year-over-year to ¥959 million.

• Cash and cash equivalents at period end were ¥41,349 million, up ¥501 million from year-end.

Outlook and guidance

• FY2024 full-year net sales forecast: ¥252.1 billion (+17.9% YoY); operating profit: ¥9.0 billion (-13.1% YoY); net income: ¥4.74 billion (-23.6% YoY).

• No change to previously announced full-year guidance.

• Manufacturing HR expects recovery in semiconductor sector in 2H, with sales up 10.8% and profit up 15.5% for the year.

• Services HR to benefit from full-year contribution of Yamato Staff Supply and seasonal logistics demand.

• Real Estate profit to decline due to fewer property sales, but rental income to support results.