Septeni (4293) Q3 2024 earnings summary

Executive summary

• Cumulative Q3 net sales grew 8.1% and revenue rose 2.7% year-over-year, but Non-GAAP operating profit fell 15.2% due to higher personnel costs.

• Profit attributable to owners surged to ¥4,271 million (+95.4% YoY), driven by gains from the sale of subsidiary shares, despite impairment losses and gains on change in equity.

• Revenue for the nine months ended September 30, 2024, was ¥20,887 million, with operating profit at ¥2,192 million.

• COMICSMART INC. and subsidiaries were excluded from consolidation and reclassified as discontinued operations.

• Revenue and Non-GAAP operating profit are expected to fall short of initial FY2024 estimates by about 9% and 36%, respectively, prompting a downward revision of guidance.

Financial highlights

• Q3 cumulative revenue: ¥20,887mn (+2.7% YoY); Non-GAAP operating profit: ¥2,253mn (-15.2% YoY); Net sales: ¥108,883mn (+8.1% YoY).

• Profit attributable to owners: ¥4,271mn (+95.4% YoY); EPS: ¥20.60 (+¥10.12 YoY).

• Gross profit margin: 79.1%; SG&A expenses up 5.8% YoY.

• Q3 (Jul-Sep) revenue: ¥6,898mn (+2.0% YoY); Non-GAAP operating profit: ¥485mn (-42.1% YoY).

• Basic earnings per share increased to ¥20.60 from ¥9.71 in the prior period.

Outlook and guidance

• FY2024 revenue forecast revised to ¥28,100mn (-9.4% from previous estimate); Non-GAAP operating profit to ¥3,000mn (-36.2%).

• Profit attributable to owners forecast at ¥5,150mn (+37.8% YoY); EPS forecast at ¥24.84.

• Net sales forecast at ¥146,200mn (+5.9% YoY).

• FY2024 year-end dividend remains at ¥31.35 per share, reflecting a payout ratio of 126.2%.

• FY2024 is a preparatory period for strategic growth investments; dividend payout ratio to exceed 50% from FY2025.