Business Brain Showa-Ota (9658) Q2 2025 earnings summary

Executive summary

• Revenue for the first six months of FY2024 reached 18,064 million yen, up 6.3% year-on-year, driven by favorable orders and the consolidation of Twinkle Co., Ltd. in the BPO segment, with a progression rate of 46.2%.

• Business profit declined 13.9% year-on-year to 1,175 million yen, and operating profit dropped by 94.0% due to the absence of a one-time gain from the previous year, with a progression rate of 49.0%.

• Profit attributable to owners of parent dropped sharply by 92.5% year-on-year to 992 million yen, reflecting the impact of last year's extraordinary gain from loss of control of subsidiaries, with a progression rate of 42.4%.

Financial highlights

• Quarterly revenue showed a recovery trend, but high personnel costs and increased SG&A expenses limited business profit growth.

• Gross profit was 4,031 million yen, up 0.7% year-on-year, as cost increases offset revenue growth.

• Business profit for Q2 was 848 million yen, up from 823 million yen in the same quarter last year.

• Basic earnings per share for the period was 85.50 yen, compared to 1,139.38 yen in the prior year.

• Total assets at September 30, 2024, were 44,404 million yen, down 400 million yen from March 31, 2024.

Outlook and guidance

• Full-year revenue forecast is 39,070 million yen, up 14.2% year-on-year.

• Full-year business profit is projected at 2,400 million yen, down 5.6% year-on-year.

• Orders and backlog indicate steady demand, with expectations for improved profitability in the second half, especially from new acquisitions.

• No changes to the previously announced full-year earnings forecast.

• Cost increases are being gradually reflected in sales, but unrealized cost increases from Q1 still impact cumulative results.