CE Holdings (4320) Q3 2024 earnings summary

Executive summary

• Revenue/net sales increased 12.0% year-over-year to ¥10,918 million in Q3, driven by large-scale EMR system deals despite a decline in clinical development support.

• Operating profit declined by 20.1% year-over-year to ¥707 million, and ordinary profit decreased by 20.2% to ¥714 million, mainly due to lower clinical development support sales.

• Net loss attributable to parent company shareholders was ¥168 million, compared to a ¥520 million profit in the prior year, impacted by impairment losses and increased tax adjustments.

Financial highlights

• Q3 revenue: ¥10,918 million (+12.0% YoY); operating profit: ¥707 million (−20.1% YoY); ordinary profit: ¥714 million (−20.2% YoY); net loss: ¥168 million (vs. ¥520 million profit YoY).

• Gross profit fell to ¥2,395 million from ¥2,596 million YoY; EPS dropped to ¥(11.17) from ¥34.75 YoY.

• Total assets decreased to ¥11,019 million from ¥11,244 million; net assets declined to ¥6,276 million from ¥6,583 million as of September 30, 2023.

• Special losses included impairment of fixed assets and goodwill for Micron and Sankaku Company, totaling ¥260 million in impairment and ¥184 million in goodwill amortization.

Outlook and guidance

• FY2024 revenue forecast revised down to ¥14,400 million (+5.6% YoY), below initial plan due to weaker clinical development and digital marketing support.

• Full-year operating and ordinary profit forecasted at ¥1,050 million, down 16.3% YoY; net profit expected to fall short of initial plan due to goodwill amortization and impairment losses.

• Dividend forecast for the year ending September 30, 2024 is ¥15.00 per share.