Pasona Group (2168) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 FY24 declined 15.1% year-over-year to ¥76.3 billion, mainly due to the exclusion of the Outsourcing segment after the sale of Benefit One Inc. and the peak-out of large BPO projects.

• Operating profit dropped to a loss of ¥436 million from a profit of ¥2.2 billion in Q1 FY23, reflecting lower sales and higher SG&A expenses.

• Net loss attributable to owners was ¥1.19 billion, compared to a profit of ¥187 million in the prior year.

• Segment reclassification implemented from FY24, with new focus areas and the Outsourcing segment excluded.

• Regional Revitalization and Tourism Solutions saw increased sales and a narrowed operating loss, while other segments generally experienced declines.

Financial highlights

• Gross profit fell 22.9% year-over-year to ¥16.4 billion; gross profit margin was 21.5%.

• SG&A expenses decreased 11.5% to ¥16.8 billion, but the SG&A ratio rose to 22.0%.

• Ordinary profit turned negative at ¥479 million, down from ¥2.2 billion.

• Basic earnings per share was ¥(30.47), compared to ¥4.79 in Q1 FY2023.

• Comprehensive income was ¥(986) million, compared to ¥1,233 million last year.

Outlook and guidance

• FY24 full-year net sales forecast at ¥330 billion, down 7.5% year-over-year.

• Operating profit expected to decline 26.4% to ¥5.0 billion; net profit forecast to drop 98.6% to ¥1.3 billion.

• Segment forecasts: BPO Solutions and Expert Solutions to see modest sales and profit growth; Global Solutions and Life Solutions expected to expand.

• Management notes that Q1 results are generally in line with plans.