Shinko Electric Industries (6967) Q2 2025 earnings summary

Executive summary

• Net sales for the first half of FY2024 increased 3.1% year-over-year to ¥108.3B, driven by growth in metal and certain plastic package products.

• Operating profit rose 10.9% year-over-year, but ordinary profit and net profit declined due to lower flip-chip package sales, higher non-operating expenses, and foreign exchange losses from yen appreciation.

• Profit attributable to owners of parent decreased 16.0% year-over-year to ¥8.2B, and earnings per share fell to ¥60.80 from ¥72.39.

• The semiconductor industry saw strong AI-related demand, but overall recovery was hampered by sluggish PC, server, and automotive markets and ongoing inventory adjustments.

Financial highlights

• Net sales: ¥108.3B (+3.1% YoY); Operating profit: ¥12.7B (+10.9% YoY); Ordinary profit: ¥11.6B (−17.8% YoY); Net profit: ¥8.2B (−16% YoY); EPS: ¥60.80.

• Gross profit increased to ¥20.1B from ¥18.5B year-over-year.

• Operating profit margin for the six months was approximately 11.8%; net profit margin was approximately 7.6%.

• Equity ratio at 69.8% as of September 30, 2024.

• Cash and cash equivalents at period end dropped to ¥66.1B from ¥98.8B a year earlier.

Outlook and guidance

• Full-year FY2024 net sales forecast at ¥243.3B; operating profit at ¥40.7B; ordinary profit at ¥40.5B; net profit at ¥27.2B; EPS forecast at ¥201.31.

• Downward revision attributed to weaker-than-expected sales in flip-chip packages, ongoing inventory adjustments, and foreign exchange losses.

• Second half expected to see a significant sequential increase in sales and profits.