Business Engineering (4828) Q1 2025 earnings summary

Executive summary

• Achieved record high net sales and profits in Q1 FY2024, with strong growth in license sales and improved project profitability across key business segments.

• Net sales for the three months ended June 30, 2024, reached ¥5,042 million, up 7.2% year-over-year, driven by robust IT investments and strong license sales.

• Operating profit rose 16.7% year-over-year to ¥1,167 million, and profit attributable to owners of parent increased 17.3% to ¥803 million, both achieving record highs for the third consecutive year.

• Maintained positive business sentiment in Japan, supported by robust IT investments from manufacturers amid ongoing digital transformation needs.

• Orders received in Q1 declined 4.5% year-over-year to ¥4,674 million, but sales growth was supported by the Solutions and Products Businesses.

Financial highlights

• Q1 FY2024 net sales rose 7.2% year-over-year to ¥5,042 million; operating profit increased 16.7% to ¥1,167 million.

• Gross profit for the quarter was ¥2,221 million, up from ¥1,989 million in the prior year; gross profit margin improved to 44.1% from 42.3% year-over-year.

• Ordinary profit increased 17.0% year-over-year to ¥1,183 million.

• Basic earnings per share rose to ¥67.07 from ¥57.08 year-over-year.

• Comprehensive income for the quarter was ¥844 million, up 10.0% year-over-year.

Outlook and guidance

• Full-year forecast for FY ending March 31, 2025, remains unchanged: net sales ¥20,500 million (+5.2%), operating profit ¥4,200 million (+8.1%), profit attributable to owners of parent ¥2,850 million (+8.5%).

• Dividend forecast for FY2025 is ¥84.00 per share, up from ¥78.00 in FY2024.

• First half FY2024 net sales forecast at ¥10.3 billion (+5.0% YoY), operating profit at ¥2.15 billion (+1.7% YoY).

• Progress rates for Q1 indicate targets are largely on track, with some segments expected to catch up in Q2.