KK Socionext

Latest Results (14.08.2024):

Net Sales Decline

KK Socionext reported net sales of 52.8 billion yen for the first quarter of fiscal year ending March 2025 (1Q FY25/3), marking a decrease of 14.1% compared to the same quarter of the previous fiscal year (1Q FY24/3). The decline in net sales was primarily attributed to the end of Special Demand and weak demand in China and for industrial equipment and consumer products.

Operating Income Increase

Despite the decline in net sales, KK Socionext's operating income for 1Q FY25/3 increased by 1.5% to 10.3 billion yen compared to 1Q FY24/3. This increase was driven by a lower product cost ratio and the positive impact of yen depreciation, which offset the decrease in product revenue.

Quarterly Comparison

When comparing 1Q FY25/3 to the previous quarter (4Q FY24/3), KK Socionext saw a 2.3% increase in net sales and a significant 35.7% increase in operating income. The improvement in operating income was largely due to an enhancement in the product cost ratio and a reduction in R&D and SG&A expenses.

Balance Sheet Overview

As of the end of 1Q FY25/3, KK Socionext's total assets stood at 177.9 billion yen, a decrease of 8.9 billion yen from the end of FY24/3. Total liabilities decreased by 13.0 billion yen to 42.8 billion yen, while total net assets increased by 4.0 billion yen to 135.1 billion yen. The decrease in total assets was mainly due to lower inventories and reduced investment in IPs and reticles.

Cash Flow and Capex

KK Socionext's cash on-hand and in banks decreased slightly due to payments of income tax and dividends. The company also reported a decrease in inventories, particularly in "customer-reserved inventories." The capital expenditure (Capex) and depreciation & amortization trends indicate a focus on maintaining a balanced cash flow, with expectations for inventory turnover months to decrease to about 3 months in the second half of FY25/3.