Kanadevia (7004) investor relations material

Executive summary

• Order intake and net sales increased year-over-year, but operating income and net income turned negative due to fewer high-margin projects, higher costs, technical issues, and extraordinary losses.

• Extraordinary losses were recorded for impairment related to the closure of Mukaishima works and costs from quality-related misconduct.

• Full-year forecasts for operating, ordinary, and net income were revised downward based on 3Q results and technical troubles.

Financial highlights

• 3Q order intake: ¥460.9B (+¥14.1B YoY); net sales: ¥424.7B (+2.7% YoY); gross profit: ¥68.9B; SG&A: ¥73.6B.

• Operating income: -¥4.6B (down ¥14.3B YoY); ordinary income: -¥4.9B; net income: -¥6.3B (down ¥11.6B YoY).

• Net income per share: -¥37.52 (down from ¥32.04 YoY); dividends per share: ¥25.

• Cash and deposits at period end: ¥68.8B; total assets: ¥655.2B; shareholders’ equity ratio: 27.0%.

• Cash flows from operating activities: -¥3.5B; investing: -¥19.1B; financing: +¥23.8B.

Outlook and guidance

• Full-year forecasts for operating income, ordinary income, and net income were revised downward, with net sales forecast at ¥620.0B (+1.6% YoY), operating income at ¥13.5B, and net income at ¥5.0B (down 77.4% YoY).

• Segment forecasts revised downward, especially for Environment and Carbon Neutral businesses.

• Environment business expects order intake of ¥572.0B and net sales of ¥478.0B for FY2025.

• Carbon Neutral Solution business maintains order intake forecast at ¥70.0B, but net sales revised down to ¥70.0B.