Meidensha Corporation TSE:6508
Meidensha : Financial Result for FY2024 Q3
Source: MarketScreener
FOR IMMEDIATE RELEASE
Meidensha Corporation Reports Earnings for the Nine Months Ended December 31, 2024
Tokyo, Japan, January 31, 2025 - Meidensha Corporation (TSE: 6508) reported consolidated net sales of ¥191,083 million and a net income attributable to owners of the parent of ¥5,931 million, or ¥130.75 per share, for the nine months ended December 31, 2024.
1. Operating Results
(1) Analysis of Operating Results
[Consolidated Results]
The management environment surrounding the Meiden Group in the nine months ended December 31, 2024 continued to show strong demand for the heavy electrical products and systems we handle against a backdrop of aggressive investment in power infrastructure in Japan and overseas. Meanwhile, there has continued to be a number of cases of delays in progress of some private and public sector construction projects due to the shortage of labor in the domestic construction sector.
The consolidated results for the nine months under review are provided below.
(Unit: millions of yen) | ||||
Nine months ended | Nine months ended | Change | Change (%) | |
December 31, 2023 | December 31, 2024 | |||
Net sales | 183,918 | 191,083 | 7,164 | 3.9 |
Operating income (loss) | (79) | 5,990 | 6,070 | - |
Ordinary income | 424 | 6,722 | 6,297 | - |
Net income | ||||
attributable to owners of | 1,641 | 5,931 | 4,289 | 261.3 |
the parent |
The results for each business segment are presented below, with sales figures including inter-segment sales.
With the absorption-type merger of MEIDEN SHOJI Co., Ltd. in the year ended March 31, 2024, the segment classification of the business conducted by MEIDEN SHOJI was changed from the three months ended June 30, 2024. The following comparisons with the same period of the previous year are based on the figures for the same period of the previous year reflecting the change.
1) Power Infrastructure Business
Sales and income increased in the Power T&D business mainly operating overseas due to steady expansion of business in Singapore, North America and Germany against the backdrop of robust demand. In the Power & Energy business mainly operating in Japan, progress in sales of the hydroelectric business decreased, while the operating rate of plants increased, resulting in income around the same level year on year. As a result, net sales in the segment increased 11.7% year on year to ¥59,213 million, and operating income improved by ¥1,628 million to ¥5,145 million.
2) Public, Industrial & Commercial Sector Business
Sales and income increased in both the Social Infrastructure business and the Water Infrastructure business due to steady capital investment associated with aging infrastructure, and the easing of the impact of high prices of parts and materials. Meanwhile, sales and income decreased in the Railways business due to a decrease in sales for overseas projects. As a result, net sales in the segment increased by 9.7% year on year to ¥56,207 million, and operating loss improved by ¥2,261million to ¥1,829 million.
3) Mobility & Electrical Components Business
In the EV business, both sales and income declined, mainly due to lower sales volume for models equipped with our products. Meanwhile, although sales in the Motor Drive Solutions business decreased, income increased due to factors such as improved income resulting from price revisions. In addition, sales and income increased in the Electronics Products business and the Mobility T&S business, which had been in a slump for a while and showed signs of improvement. As a result, net sales in the segment decreased by 8.5% year on year to ¥51,549 million, and operating income improved by ¥944 million to ¥219 million.
4) Field Service Engineering Business
In addition to the continuation of steady demand for maintenance services, an increase in demand for projects with sales posted this fiscal year resulted in sales increasing by 16.6% to ¥26,199 million and operating income improving by ¥1,417 million to ¥2,907 million.
5) Real Estate Business
Net sales in the segment increased 0.2% year on year to ¥2,426 million, and operating income improved by ¥12 million to ¥1,097 million.
6) Other
In businesses not included in reportable segments, while net sales decreased by 20.5% year on year to ¥6,008 million, operating income improved by ¥161 million to ¥194 million.
(2) Analysis of Financial Condition
Total assets at December 31, 2024 amounted to ¥334,947 million, an increase of ¥159 million from the end of the previous fiscal year (March 31, 2024).
Current assets rose ¥3,679 million to ¥212,182 million due to an increase in inventories, although collection of notes and accounts receivable-trade, and contract assets progressed.
Fixed assets declined by ¥3,519 million to ¥122,764 million due to a decrease in investment securities caused by sale and a fall in market prices of listed shares held by the Company.
Total liabilities at December 31, 2024 were ¥203,318 million, a decrease of ¥1,980 million from the end of the previous fiscal year, attributable to redemption of bonds and a decrease in notes and accounts payable-trade.
Total net assets rose ¥2,139 million to ¥131,628 million due to recording net income attributable to owners of the parent despite paying cash dividends.
As a result, the equity ratio came to 38.3% as of December 31, 2024, compared with 37.8% at the end of the previous fiscal year.
(3) Forecast of Consolidated Results
With regard to the forecast of results for the year ending March 31, 2025, net sales, operating income, ordinary income and net income attributable to owners of the parent are expected to be higher than the previously announced forecast due to improvements in performance being expected to continue against the backdrop of robust demand primarily in the Power Infrastructure business and the Field Service Engineering business, despite a decline in demand in the EV business.
The current management forecast for consolidated financial results for the year ending March 31, 2025 is as follows.
Revision of consolidated results forecast figures for the year ending March 31, 2025 (April 1, 2024 to March 31, 2025)
Operating | Ordinary | Net income | |||
Net sales | attributable to | ||||
income | income | Net income per | |||
(millions of | owners of the | ||||
(millions of | (millions of | share (yen) | |||
yen) | parent | ||||
yen) | yen) | ||||
(millions of yen) | |||||
Previous | 300,000 | 16,000 | 15,500 | 11,500 | 253.49 |
forecast (A) | |||||
Revised | 305,000 | 18,500 | 18,500 | 14,000 | 308.60 |
forecast (B) | |||||
Change (B-A) | 5,000 | 2,500 | 3,000 | 2,500 | － |
Change (%) | 1.7 | 15.6 | 19.4 | 21.7 | － |
(Reference) | |||||
Results for the | |||||
previous fiscal | |||||
year | 287,880 | 12,731 | 13,385 | 11,205 | 247.00 |
(Fiscal year | |||||
ended March 31, | |||||
2024) |
2. Consolidated Financial Statements and Notes
(1) Consolidated Balance Sheets
As of March 31, | As of December 31, | |
2024 | 2024 | |
millions of yen | millions of yen | |
Assets | ||
Current assets | ||
Cash and time deposits | 18,984 | 31,402 |
Notes and accounts receivable-trade, and contract assets | 106,385 | 75,304 |
Electronically recorded monetary claims- operating | 9,317 | 8,181 |
Merchandise and finished goods | 10,806 | 12,358 |
Work in process | 41,717 | 63,302 |
Raw materials and supplies | 14,700 | 14,136 |
Other current assets | 6,893 | 7,991 |
Allowance for doubtful accounts | (302) | (496) |
Total current assets | 208,503 | 212,182 |
Fixed assets | ||
Property, plant and equipment | ||
Buildings and structures, net | 39,133 | 38,676 |
Machinery, equipment and vehicles, net | 15,292 | 14,782 |
Land | 12,542 | 12,554 |
Construction in progress | 2,876 | 3,864 |
Other property, plant and equipment, net | 5,518 | 5,421 |
Total property, plant and equipment | 75,363 | 75,299 |
Intangible assets | ||
Software | 4,774 | 4,434 |
Goodwill | 2,175 | 1,668 |
Other | 699 | 672 |
Total intangible assets | 7,650 | 6,774 |
Investments and other assets | ||
Investment securities | 26,558 | 24,156 |
Long-term loans receivable | 30 | 34 |
Deferred tax assets | 14,377 | 14,242 |
Other assets | 2,331 | 2,284 |
Allowance for doubtful accounts | (27) | (27) |
Total investments and other assets | 43,270 | 40,690 |
Total fixed assets | 126,284 | 122,764 |
Total assets | 334,787 | 334,947 |
As of March 31, | As of December 31, | |
2024 | 2024 | |
millions of yen | millions of yen | |
Liabilities | ||
Current liabilities | ||
Notes and accounts payable-trade | 35,918 | 31,817 |
Electronically recorded obligations-operating | 4,238 | 2,357 |
Short-term borrowings | 9,912 | 11,849 |
Commercial paper | 10,000 | 18,000 |
Current portion of bonds payable | 6,000 | - |
Accounts payable-other | 6,413 | 4,830 |
Accrued income taxes | 3,216 | 1,184 |
Contract liabilities | 19,461 | 30,434 |
Accrued bonuses for employees | 8,348 | 4,821 |
Provision for product warranties | 1,281 | 1,121 |
Provision for loss on orders | 833 | 643 |
Other current liabilities | 18,618 | 17,811 |
Total current liabilities | 124,242 | 124,872 |
Long-term liabilities | ||
Long-term debt | 28,767 | 24,973 |
Net defined benefit liability | 47,445 | 48,681 |
Provision for environmental measures | 63 | 60 |
Other long-term liabilities | 4,780 | 4,730 |
Total long-term liabilities | 81,056 | 78,446 |
Total liabilities | 205,298 | 203,318 |
Net assets | ||
Shareholders' equity | ||
Common stock | 17,070 | 17,070 |
Capital surplus | 10,226 | 10,226 |
Retained earnings | 78,642 | 80,717 |
Treasury stock | (197) | (201) |
Total shareholders' equity | 105,741 | 107,813 |
Accumulated other comprehensive income | ||
Unrealized gains on available-for-sale securities | 13,297 | 11,731 |
Foreign currency translation adjustment | 7,610 | 8,881 |
Remeasurements of defined benefit plans | (241) | (123) |
Total accumulated other comprehensive income | 20,665 | 20,489 |
Non-controlling interests | 3,081 | 3,325 |
Total net assets | 129,488 | 131,628 |
Total liabilities and net assets | 334,787 | 334,947 |
- Consolidated Statements of Income and Consolidated Statements of Comprehensive Income Consolidated Statements of Income
Nine months ended | Nine months ended | |
December 31, 2023 | December 31, 2024 | |
millions of yen | millions of yen | |
Net sales | 183,918 | 191,083 |
Cost of sales | 142,788 | 141,146 |
Gross profit | 41,130 | 49,937 |
Selling, general and administrative expenses | 41,210 | 43,946 |
Operating income (loss) | (79) | 5,990 |
Non-operating income | ||
Interest income | 94 | 232 |
Dividend income | 679 | 790 |
Rent income | 73 | 66 |
Foreign exchange gains | 366 | 318 |
Other | 566 | 727 |
Total non-operating income | 1,780 | 2,135 |
Non-operating expenses | ||
Interest expenses | 661 | 772 |
Seconded employee expenses | 71 | 59 |
Other | 541 | 572 |
Total non-operating expenses | 1,275 | 1,404 |
Ordinary income (loss) | 424 | 6,722 |
Extraordinary income | ||
Gain on sales of fixed assets | 3,236 | 675 |
Gain on sales of investment securities | - | 1,274 |
Gain on negative goodwill | - | 19 |
Insurance claim income | 207 | 50 |
Other | 1 | - |
Total extraordinary income | 3,445 | 2,019 |
Extraordinary loss | ||
Loss on liquidation of subsidiaries and associates | 180 | 20 |
Impairment loss | 97 | - |
Fire losses | 735 | - |
Loss on disaster | - | 252 |
Other | 37 | - |
Total extraordinary loss | 1,050 | 272 |
Income (loss) before income taxes | 2,819 | 8,469 |
Income taxes | ||
Current | 973 | 1,517 |
Deferred | 189 | 768 |
Total income taxes | 1,162 | 2,285 |
Net income (loss) | 1,656 | 6,184 |
Net income (loss) attributable to the non-controlling interests | 15 | 252 |
Net income (loss) attributable to owners of the parent | 1,641 | 5,931 |
Consolidated Statements of Comprehensive Income
Nine months ended | Nine months ended | |
December 31, 2023 | December 31, 2024 | |
millions of yen | millions of yen | |
Net income (loss) | 1,656 | 6,184 |
Other comprehensive income | ||
Unrealized gains (losses) on available-for-sale securities | 3,406 | (1,565) |
Foreign currency translation adjustment | 1,326 | 1,315 |
Remeasurements of defined benefit plans | 161 | 117 |
Total other comprehensive income | 4,894 | (132) |
Comprehensive income | 6,550 | 6,051 |
Comprehensive income attributable to: | ||
Owners of the parent | 6,510 | 5,755 |
Non-controlling interests | 40 | 295 |
(3) Consolidated Statements of Cash Flows
Nine months ended | Nine months ended | |
December 31, 2023 | December 31, 2024 | |
millions of yen | millions of yen | |
Cash flows from operating activities | ||
Income (loss) before income taxes | 2,819 | 8,469 |
Depreciation and amortization | 7,469 | 7,695 |
Amortization of goodwill | 512 | 555 |
Increase (decrease) in provisions | (3,244) | (3,752) |
Increase (decrease) in net defined benefit liability | 1,370 | 1,381 |
Interest and dividend income | (774) | (1,023) |
Interest expenses | 661 | 772 |
Loss (gain) on sales of property, plant and equipment | (3,236) | (675) |
Loss (gain) on sales of investment securities | - | (1,274) |
Insurance claim income | (207) | (50) |
Fire losses | 735 | - |
Decrease (increase) in trade receivables and contract assets | 31,713 | 43,485 |
Decrease (increase) in inventories | (19,448) | (21,667) |
Increase (decrease) in trade payables | (5,313) | (7,374) |
Other | (3,183) | (1,820) |
Sub total | 9,872 | 24,723 |
Interest and dividends received | 767 | 1,026 |
Interest expenses paid | (637) | (753) |
Proceeds from insurance income | 207 | 529 |
Payments for fire losses | (118) | (25) |
Income taxes paid | (4,919) | (4,233) |
Net cash provided by (used in) operating activities | 5,172 | 21,266 |
Cash flows from investing activities | ||
Proceeds from sale of property, plant and equipment | 3,450 | 993 |
Purchase of property, plant and equipment, and intangible | (6,269) | (7,268) |
assets | ||
Proceeds from sales of investment securities | - | 1,422 |
Proceeds from purchase of stocks of subsidiaries | - | 11 |
resulting in change in scope of consolidation | ||
Other | (1,419) | (348) |
Net cash provided by (used in) investing activities | (4,239) | (5,189) |
Cash flows from financing activities | ||
Net increase (decrease) in short-term borrowings | (1,470) | (2,124) |
Increase (decrease) in commercial paper | 10,000 | 8,000 |
Proceeds from long-term debt | 248 | - |
Repayment of long-term debt | (2,092) | (58) |
Redemption of bonds | - | (6,000) |
Cash dividends paid | (2,007) | (3,803) |
Cash dividends paid to non-controlling interests | (53) | (51) |
Other | (207) | (357) |
Net cash provided by (used in) financing activities | 4,417 | (4,395) |
Effect of exchange rate on cash and cash equivalents | 462 | 673 |
Net increase (decrease) in cash and cash equivalents | 5,813 | 12,355 |
Cash and cash equivalents at beginning of term | 14,116 | 17,224 |
Cash and cash equivalents at end of term | 19,930 | 29,579 |
- Notes on Consolidated Financial Statements
(Notes on the Going-concern Assumption) Not applicable
(Notes on Significant Changes in the Amount of Shareholders' Equity) Not applicable
(Changes to Significant Matters that Serve as the Basis for Preparation of Consolidated Financial Statements) Significant Changes to Scope of Consolidation
During the nine months ended December 31, 2024, KESENNUMA KANKYOKANRI CORPORATION was included in the scope of consolidation due to the acquisition of its shares.
(Changes in Accounting Methods)
(Application of Accounting Standard for Current Income Taxes, etc.)
The "Accounting Standard for Current Income Taxes" (ASBJ Statement No. 27, October 28, 2022; "2022 Revised Accounting Standard") has been applied from the beginning of the three months ended June 30, 2024.
With regard to the revisions concerning the accounting classification of income taxes (taxation on other comprehensive income), these are subject to the provisional treatment set forth in the proviso of paragraph 20-3 of the 2022 Revised Accounting Standard and the provisional treatment set forth in the proviso of paragraph 65-2 (2) of the "Guidance on Accounting Standard for Tax Effect Accounting" (ASBJ Guidance No. 28, October 28, 2022; "2022 Revised Guidance").This change has no impact on the quarterly consolidated financial statements.
In addition, the Company has adopted the 2022 Revised Guidance for the revisions related to the review of the treatment in consolidated financial statements deferring gains or losses on sales of investments in subsidiaries among consolidated companies for tax purposes, effective from the beginning of the three months ended June 30, 2024. The change in accounting policy has been applied retrospectively, and the quarterly consolidated financial statements for the quarters of the previous fiscal year and the consolidated financial statements of the previous fiscal year have been prepared on a retrospective basis. This change has no impact on the quarterly consolidated financial statements for the quarters of the previous fiscal year or the consolidated financial statements of the previous fiscal year.
(Notes on Segment and Other Information)
- Nine months ended December 31, 2023 (April 1, 2023 to December 31, 2023) Net sales and income/loss by reportable segment
(Millions of yen) | ||||||||||
Reportable segment | Amounts on | |||||||||
consolidated | ||||||||||
Public, | Mobility & | Other | Adjustments | |||||||
Power | Field Service | Total | statements of | |||||||
Industrial & | (Note1) | (Note2) | ||||||||
Electrical | Real Estate | Sub-total | income | |||||||
Infrastructure | Commercial | Engineering | ||||||||
Components | (Note3) | |||||||||
Sector | ||||||||||
Net sales | ||||||||||
Sales to | ||||||||||
outside | 52,594 | 48,944 | 55,059 | 21,189 | 2,393 | 180,181 | 3,736 | 183,918 | - | 183,918 |
customers | ||||||||||
Inter- | ||||||||||
segment | 398 | 2,305 | 1,260 | 1,275 | 28 | 5,269 | 3,817 | 9,086 | (9,086) | - |
sales and | ||||||||||
transfers | ||||||||||
Total | 52,992 | 51,250 | 56,320 | 22,465 | 2,421 | 185,450 | 7,553 | 193,004 | (9,086) | 183,918 |
Segment | 3,517 | (4,090) | (724) | 1,490 | 1,085 | 1,277 | 33 | 1,310 | (1,390) | (79) |
income (loss) | ||||||||||
Notes: 1. "Other" comprises businesses such as sales of other products, employees' welfare services, and provision of chemical products, that are not included in the reportable segments.
- Adjustment to segment income (loss), which amounted to minus ¥1,390 million, consists mainly of ¥565 million for elimination of inter-segment transactions among reportable segments, minus ¥5 million for adjustments of inventories, and minus ¥1,951 million for company-wide costs that do not belong to any reportable segments. Company-wide costs are comprised mainly of expenses for research and development conducted by the research and development division and other units that are not included in the reportable segments.
- Adjustment to segment income (loss) is based on operating income/loss reported in the quarterly consolidated statements of income for the corresponding period.
- Nine months ended December 31, 2024 (April 1, 2024 to December 31, 2024)
1. Net sales and income/loss by reportable segment
(Millions of yen)
Reportable segment | Amounts on | |||||||||
Public, | Mobility & | Other | Total | Adjustments | consolidated | |||||
Power | Industrial & | Field Service | (Note1) | (Note2) | statements of | |||||
Electrical | Real Estate | Sub-total | income | |||||||
Infrastructure | Commercial | Engineering | ||||||||
Components | (Note3) | |||||||||
Sector | ||||||||||
Net sales | ||||||||||
Sales to | ||||||||||
outside | 58,336 | 52,591 | 50,454 | 24,837 | 2,397 | 188,617 | 2,465 | 191,083 | - | 191,083 |
customers | ||||||||||
Inter- | ||||||||||
segment | 877 | 3,615 | 1,095 | 1,362 | 28 | 6,978 | 3,542 | 10,521 | (10,521) | - |
sales and | ||||||||||
transfers | ||||||||||
Total | 59,213 | 56,207 | 51,549 | 26,199 | 2,426 | 195,596 | 6,008 | 201,604 | (10,521) | 191,083 |
Segment | 5,145 | (1,829) | 219 | 2,907 | 1,097 | 7,541 | 194 | 7,736 | (1,745) | 5,990 |
income (loss) | ||||||||||
Notes: 1. "Other" comprises businesses such as sales of other products, employees' welfare services, and provision of chemical products, that are not included in the reportable segments.
- Adjustment to segment income (loss), which amounted to minus ¥1,745 million, consists mainly of ¥487 million for elimination of inter-segment transactions among reportable segments, minus ¥126 million for adjustments of inventories, and minus ¥2,106 million for company-wide costs that do not belong to any reportable segments. Company-wide costs are comprised mainly of expenses for research and development conducted by the research and development division and other units that are not included in the reportable segments.
- Adjustment to segment income (loss) is based on operating income/loss reported in the quarterly consolidated statements of income for the corresponding period.
2． Information on changes in reportable segments
In the previous fiscal year, the Company conducted an absorption-type merger with MEIDEN SHOJI Co., Ltd. Accordingly, MEIDEN SHOJI's business, which was included in "Other" until the previous fiscal year, has been split according to the content of the business and included in "Power Infrastructure," "Public, Industrial & Commercial Sector," and "Mobility & Electrical Components" businesses from the three months ended June 30, 2024.
"Net sales and income/loss by reportable segment" for the nine months ended December 31, 2023 has been reclassified to reflect the new amounts.