Kanadevia (7004) Q1 2025 earnings summary

Executive summary

• 1Q FY2025 saw a year-on-year decline in operating income, with net sales rising 3.2% to ¥125.4bn, but losses deepened compared to the prior year.

• Order intake and net sales both increased sequentially, but profitability was impacted by non-operating losses and extraordinary items.

• Quality misconduct issues in the Marine Engine business are being addressed with ongoing investigations and preventive measures; impact not yet fully determined.

• Cash and cash equivalents declined significantly, and total assets decreased by ¥45.1bn from March 31, 2025.

Financial highlights

• 1Q FY2025 order intake was ¥126.2bn, down ¥78.0bn year-over-year; net sales rose to ¥125.4bn, up ¥3.9bn.

• Operating loss widened to ¥4.1bn from ¥0.9bn YoY; ordinary loss increased to ¥4.7bn from ¥2.1bn.

• Profit attributable to shareholders was -¥3.6bn, a decrease of ¥0.8bn YoY.

• Cash and cash equivalents at quarter-end were ¥52.5bn, down ¥35.2bn from the previous year.

• Cash flows from operating activities dropped to ¥17.6bn from ¥46.8bn YoY.

Outlook and guidance

• Full-year FY2025 forecasts remain unchanged: net sales ¥620.0bn, operating income ¥27.0bn, ordinary income ¥23.0bn, net income ¥16.0bn.

• Dividend forecast maintained at ¥25 per share for the year.

• Segment forecasts and order intake guidance remain unchanged.

• Profit improvement is anticipated in the Environment and Carbon Neutral Solution businesses.