The Japan Steel Works (5631) Q2 2024 earnings summary

Executive summary

• Orders received and net sales declined year-over-year in the first half of FY2024, but profits and operating income increased, driven by price improvements and cost allocation revisions.

• Net sales for the six months ended September 30, 2024, were ¥108.2B, down 1.7% year-over-year.

• Operating profit rose 43.3% year-over-year to ¥8.3B, and profit attributable to owners increased 26.2% to ¥6.0B.

• Full-year FY2024 forecasts were revised: orders received lowered, but net sales, operating income, and profit are expected to exceed previous forecasts.

• Earnings per share for the period were ¥81.65, up from ¥64.73 in the prior year.

Financial highlights

• First half FY2024: Orders received ¥141.0B (down ¥24.9B), net sales ¥108.2B (down ¥1.9B), operating income ¥8.2B (up ¥2.5B), profit ¥6.0B (up ¥1.3B), EPS ¥81.65 (up ¥16.92), dividend per share ¥38.0 (up ¥9.0).

• Gross profit increased to ¥26.4B from ¥24.7B year-over-year.

• Ordinary profit rose to ¥8.6B, up 26.8% year-over-year.

• Equity ratio improved to 49.6% from 48.3% as of March 31, 2024.

• Total assets as of September 30, 2024, were ¥365.3B, slightly down from ¥366.8B as of March 31, 2024.

Outlook and guidance

• FY2024 orders received forecast revised to ¥365.0B (down ¥10.0B), net sales to ¥270.0B (up ¥5.0B), operating income to ¥22.0B (up ¥2.0B), profit to ¥16.0B (up ¥0.5B), EPS to ¥217.39, dividend per share to ¥76.0.

• Operating income for FY2024 expected to rise by ¥4.0B, mainly from increased production, sales, and price improvements.

• Full-year net sales forecast is ¥270.0B, up 6.9% year-over-year.

• Annual dividend per share forecast is ¥76.00, up from ¥59.00 in the previous year.