Mitsui High-tec (6966) Q1 2025 earnings summary

Executive summary

• Net sales rose 11.4% year-over-year to JPY 50,431 million, driven by strong demand for motor cores for electric vehicles and Yen depreciation, while operating profit increased 3.9% due to higher upfront investment costs.

• Profit attributable to owners of parent surged 48.7% to JPY 4,777 million, supported by foreign exchange gains.

• Comprehensive income increased 83.9% year-on-year to JPY 7,709 million.

• Electrical Parts sales grew on increased orders and new product mass production, but operating profit was flat due to higher expenses from investments.

• Electronic Parts saw sales and profit rise from Yen depreciation, despite weak semiconductor demand.

Financial highlights

• Net sales: JPY 50,431 million (+11.4% YoY); Operating profit: JPY 3,971 million (+3.9% YoY); Net profit: JPY 4,777 million (+48.7% YoY).

• EBITDA: JPY 7,335 million (+16.4% YoY); Operating profit margin: 7.9% (down 0.6 pts YoY); Net profit margin: 9.5% (up 2.4 pts YoY).

• Ordinary profit surged 42.4% year-on-year to JPY 6,462 million, supported by JPY 2,275 million in foreign exchange gains.

• Capital investment surged 78.0% YoY to JPY 9,613 million; Depreciation up 35.8% YoY to JPY 3,364 million.

• Compared to previous quarter, net sales fell 2.6%, operating profit dropped 21.3%, but net profit rose 26.4%.

Outlook and guidance

• Full-year forecast for FY ending January 31, 2025: net sales JPY 237,000 million (+21.0% YoY), operating profit JPY 21,000 million (+15.9%), ordinary profit JPY 20,000 million (–8.0%), profit attributable to owners of parent JPY 14,000 million (–9.9%), and basic EPS JPY 76.61 (reflecting stock split).

• Electrical Parts expected to see continued strong orders, but production adjustments at major customers and Chinese market trends are being monitored.

• Electronic Parts demand for semiconductors is expected to remain sluggish in Q2, with ongoing monitoring for recovery.

• Demand trends in automotive and semiconductor industries remain unpredictable, but the company aims to continue increasing profit.