Euglena (2931) Q2 2024 earnings summary

Executive summary

• Achieved profitability in 1H FY2024, with net sales of JPY23.6 bln (+3.7% YoY) and adjusted EBITDA of JPY2.1 bln (up 66.8% YoY).

• Operating income turned positive at JPY348 mln, reversing prior year losses, driven by Saticine Medical Group consolidation.

• Profit attributable to owners improved but remained negative at JPY(267) mln; comprehensive income loss narrowed to JPY(325) mln.

• Revised annual sales forecast downward to JPY48 bln due to divestment and conservative biofuel transaction planning.

• Adjusted EBITDA forecast revised upward to JPY3.8 bln, reflecting strong Healthcare Business performance.

Financial highlights

• 1H 2024 sales: JPY23.6 bln (+4% YoY); adjusted EBITDA: JPY2.1 bln (59% of annual forecast), up 66.8% YoY.

• Operating income for 1H: JPY348 mln, reversing prior year losses.

• Net income negative due to extraordinary loss from ad management subsidiary divestment.

• Gross margin rate improved to 69.5% in 1H 2024; gross profit rose to JPY16,434 mln.

• Saticine Medical Group consolidation significantly boosted sales and EBITDA.

Outlook and guidance

• FY2024 sales forecast revised to JPY48 bln (from JPY52.5 bln), reflecting biofuel market and divestment impacts.

• Adjusted EBITDA forecast raised to JPY3.8 bln (from JPY3.6 bln), driven by Healthcare Business momentum.

• Operating profit projected at JPY3.8 bln, a 71% increase YoY.

• Biofuel business targets JPY30 bln sales and over JPY6 bln adjusted EBITDA with a 15% JV stake in Malaysia plant.

• Commercial biofuel plant in Malaysia (USD1.3 bln project) to start operations by 2H 2028.