Pasona Group (2168) Q4 2024 earnings summary

Executive summary

• Net sales for FY2023 declined 4.3% year-over-year to ¥356.7 billion, mainly due to the end of COVID-19-related special demand and the sale of Benefit One Inc.

• Operating profit dropped 52.7% year-over-year to ¥6.8 billion, reflecting lower gross profit and increased personnel expenses.

• Extraordinary profit of ¥112.0 billion was recorded from the sale of Benefit One shares, resulting in net profit attributable to owners of parent surging to ¥95.9 billion.

• The company plans to use proceeds from the sale for growth investments, management base strengthening, and expanded shareholder returns.

Financial highlights

• Gross profit fell 7.3% year-over-year to ¥84.8 billion, with the gross profit ratio down 0.8pt to 23.8%.

• SG&A expenses increased 1.1% year-over-year, mainly due to personnel reinforcement and upfront investment in growth areas.

• Ordinary profit decreased 53.5% year-over-year to ¥7.2 billion.

• Cash and deposits rose by ¥69.2 billion to ¥192.3 billion, driven by proceeds from the Benefit One sale.

• Free cash flow turned positive to ¥101.6 billion from negative ¥6.5 billion in the prior year.

Outlook and guidance

• FY2024 net sales are forecast to decline 7.5% year-over-year to ¥330.0 billion, reflecting the exclusion of Benefit One.

• Operating profit is projected to decrease 26.4% year-over-year to ¥5.0 billion.

• Net profit attributable to owners of parent is expected to drop 98.6% year-over-year to ¥1.3 billion, normalizing after the one-time gain.

• Segment forecasts anticipate growth in BPO, Expert, Career, Global, Life, and Regional Revitalization Solutions.