USS (4732) Q2 2025 earnings summary

Executive summary

• Net sales for 1H FY2024 rose 4.9% year-over-year to ¥50.45 billion, with operating profit up 10.3% to ¥26.23 billion and profit attributable to owners up 12.2% to ¥18.14 billion, marking record highs across key profit metrics.

• Q2 FY2024 saw a recovery in new vehicle sales in July and September year-over-year, despite a negative trend through June and a typhoon impact in August.

• Used vehicle demand remained robust domestically and for exports, driving record-high consolidated sales and profits across all categories.

• The FY2024 plan was revised upward following strong Q2 results, with operating profit forecast increased to ¥52.9 billion and a dividend forecast raised to ¥41.6 per share, continuing 25 years of dividend growth.

• Dividend per share was revised upward, and a share repurchase program of up to JPY 10 billion was announced, targeting a total return ratio of 80% or more.

Financial highlights

• Gross profit margin improved to 62.2% in 1H FY2024 from 60.3% a year earlier, with operating margin up to 52.0% from 49.4% year-over-year.

• Record-high consolidated results in both sales and all profit categories were achieved.

• Rabbit segment net sales rose 16% YoY to JPY 3.7 billion, with operating profit up 61% YoY.

• Accident-damaged vehicle business net sales increased 24% YoY to JPY 2.6 billion, with operating profit up 167% YoY.

• Resource recycling business net sales grew 10% YoY to JPY 2.8 billion, with operating profit up 52% YoY.

Outlook and guidance

• Full-year net sales forecast is ¥102.6 billion, up 5.1% year-over-year, with operating profit forecast at ¥52.9 billion, up 8.1%.

• Expectation of increased new car registrations in the second half, leading to more used cars in circulation and favorable auction conditions.

• Contract completion ratio for auctions is expected to reach 67.2% for FY2024.

• Construction of new venues in Yokohama and Tokyo, with significant CapEx planned over the next three years.

• Targeting 45% market share as an intermediate goal, with a long-term aim of 50%.