Nagase (8012) Q1 2025 earnings summary

Executive summary

• Achieved record first-quarter gross profit and improved gross profit margin across all segments, with consolidated performance exceeding full-year forecasts despite higher SG&A expenses and challenges in Prinova Group manufacturing.

• Net sales rose 6.8% year-over-year to ¥239.2 billion for the quarter ended June 30, 2024, with all profit stages increasing, driven by a weaker yen and improved gross profit.

• Operating income and ordinary income rose significantly year-over-year, with profit attributable to owners of the parent up 70%.

• Profit attributable to owners of the parent surged 69.8% year-over-year to ¥7.4 billion, aided by reduced losses on investment securities and higher operating income.

• Comprehensive income increased 44.0% year-over-year to ¥21.4 billion.

Financial highlights

• Sales increased 6.8% year-over-year to ¥239.2 billion in Q1 FY2024.

• Gross profit rose 18.3% to ¥45.8 billion, with a margin improvement of 1.9ppt to 19.1%.

• Operating income surged 54.3% to ¥10.7 billion, with a margin of 4.5%.

• Earnings per share increased to ¥65.42 from ¥37.45 a year earlier.

• Shareholders’ equity ratio was 49.0%, down 0.7 points from the prior year-end.

Outlook and guidance

• FY2024 guidance unchanged: sales ¥940 billion, gross profit ¥180 billion, operating income ¥36.5 billion, profit attributable to owners ¥28 billion, EPS ¥254.30.

• Expect increased manufacturing earnings in semiconductor- and food-related businesses, with trading business resin sales and automobile-related business to remain firm.

• SG&A expenses projected to rise with business growth, but retirement benefit actuarial differences will provide a ¥3.5 billion income in FY2024.

• No changes to the previously announced earnings forecast.