Sojitz (XEB) Q3 2024 Earnings Report

The earnings call reflects balanced aspects of Sojitz Corporation's performance. While there are notable achievements such as the upward revision of profit forecasts, strong cash flow, and growth in certain segments, these are counterbalanced by declines in profit, challenges in key segments, and increased SG&A expenses.

During the Q3 2024 earnings call, Makoto Shibuya, CFO of Sojitz Corporation, discussed the financial performance and future outlook of the company. Consolidated profit for the period was JPY 75.2 billion, representing a 30% decline year-on-year but achieving 75% of the revised full-year forecast of JPY 100 billion. The decline was primarily attributed to lower coal prices and reduced demand for chemical products. Despite these challenges, progress in new investments and asset accumulation contributed to gross profit growth, totaling JPY 242.3 billion. The annual dividend forecast was raised to JPY 135 per share, with a payout ratio of 30.2%. Cash flow from operating activities was a net inflow of JPY 86.2 billion, and free cash flow was JPY 111.7 billion. The company's PBR was at 0.86, with efforts ongoing to achieve a target of above 1x. Shibuya highlighted improvements in Automotive, Infrastructure & Healthcare, and Retail & Consumer Service segments, while noting challenges in Metals, Mineral Resources & Recycling due to market conditions. The presentation concluded with an optimistic outlook for achieving an average net profit of over JPY 120 billion in the next MTP period.