ZERO (9028) Q2 2023 earnings summary

Executive summary

• H1 FY June 2023 revenue rose 38.4% YoY to ¥64.247bn and operating profit rose 61.8% to ¥2.174bn, driven by higher vehicle-transport volumes and strong used-car exports.

• Operating profit increased across all segments; higher utilization in vehicle transport was the largest contributor.

Financial highlights

• Revenue ¥64.247bn, up ¥17.823bn YoY; operating profit ¥2.174bn, up ¥830m; profit before tax ¥2.172bn, up ¥809m.

• Profit attributable to owners ¥1.457bn, up ¥635m YoY; basic EPS ¥86.54, up ¥37.62; interim dividend ¥15.0 per share, unchanged YoY.

• Revenue growth reflected more contracted vehicle-transport volume and strong used-car exports; fuel surcharge arrangements limited exposure to changes in fuel unit prices.

Outlook and guidance

• FY June 2023 revenue guidance raised from ¥109bn to ¥119bn; operating profit and profit before tax raised from ¥4.2bn to ¥4.3bn each.

• Revised net profit attributable to owners is ¥2.75bn and basic EPS ¥163.31; revised operating margin is 3.6%.

• Guidance revision reflects stronger-than-expected used-car exports to Malaysia; higher revenue is expected to lift operating profit.

• Mid-term priorities through FY June 2024 include addressing logistics labor-hour limits, EV transition and digitization; expanding driver recruitment, MaaS and biomass-fuel handling; and rebuilding China operations.