Alps Alpine (6770) Q1 2024 earnings summary

Executive summary

• Achieved record 1Q sales and income growth, with net sales up 6.9% YoY to ¥233.5–¥233.6B and operating income of ¥1.2B, reversing a prior-year loss, aided by yen depreciation and strong mobile/auto demand.

• Ordinary income increased to ¥4.7–¥4.8B, and profit attributable to owners was ¥0.4B, reversing a ¥2.3B loss YoY.

• Comprehensive income grew 22.8% to ¥15.9B, driven by foreign currency translation gains.

• Growth was partially offset by the end of certain automotive system models and weak new car sales, especially in China.

• The company is focusing on management structure reform and cost structure improvements, including canceling its 2nd Mid-Term Business Plan to prepare for a V-shaped recovery.

Financial highlights

• Net sales rose to ¥233.5–¥233.6B (+6.9% YoY), operating income improved to ¥1.2B from a ¥2.5B loss, and ordinary income increased to ¥4.7–¥4.8B.

• Profit attributable to owners of parent was ¥0.4B, reversing a ¥2.3B loss YoY.

• Gross profit increased to ¥41.5B from ¥34.8B YoY.

• Basic earnings per share improved to ¥2.17 from a loss of ¥11.55 in the prior year.

• Equity ratio improved to 52.9% from 51.9% at March 2023.

Outlook and guidance

• 1H forecast revised upward due to yen depreciation and higher component sales for mobile and consumer electronics.

• Full-year net sales forecast raised to ¥925B, with operating income projected at ¥23B and profit attributable to owners at ¥30B.

• Operating income projected at ¥23B (up 16.7%), ordinary income at ¥24B (down 3.3%), and net income at ¥30B (up 145.9%).

• Six-month forecast: net sales ¥485B, operating income ¥10B, net income ¥2B.

• 2H expected to slow, particularly in the automotive market, despite strong 1H performance.