Performance Trend 1. Overview of performance for FY3/2024 Consolidated performance for FY3/2024 of G-7 Holdings <7508> was 192,992 million yen in increased operating income of 9.1% over the previous year, and increased ordinary income of 7.4% to 7,318 million yen, and attributed to the parent company's net income of 5,175 million yen, an increase of 35.3% over the previous year. Sales were driven by the Business Supermarket Business and the Meat Business, and continued to set a new record high, exceeding the company's plan by 4.3%. However, in terms of profits, the automobile-related business was affected by a decrease in profits due to poor sales of winter tires due to a warm winter, and could not reach the company's plan, it turned to a profit increase for the second time due to the growth of other businesses centered on the Business Supermarket business. The sales cost ratio has increased by 0.8 points over the previous year due to changes in the sales composition ratio; however, the selling, general and administrative expense ratio decreased by 0.7 points due to the effect of increased earnings, and the operating margin decreased by 0.1 points to 3.6%. The main reasons for the increase/decrease of selling, general and administrative expenses were a decrease of 600 million yen in energy costs due to subsidies from rising electricity prices, and an increase of 1 billion yen in labor costs due to improvements in employee treatment and increased education costs. In addition to this, depreciation expenses increased by nearly 600 million yen due to rising construction material costs and rising costs of opening stores etc. The EBITDA margin has increased by 0.1 points from the previous year. Also, the reason for the large increase in the net income of the parent company's shareholders attributable to the current period is due to the elimination of 500 million yen in retirement benefits paid to executives that were recorded as special losses in the previous year, a decrease of 455 million yen in impairment losses, and a gain of 127 million yen on the sale of investment securities in FY3/2024.
2. Financial condition and performance indicators.
As of the end of March 2024, Delica Foods Holdings (3392) had total assets of 28.848 billion yen, an increase of 3.981 billion yen from the previous period. Looking at the main factors of volatility, current assets decreased by 1.252 billion yen in cash and deposits due to payment of construction costs for the new factory (Osaka FS Center), while accounts receivable increased by 1.076 billion yen and other current assets also increased. In addition, due to the impact of holidays at the end of March, accounts receivable increased by approximately 700 million yen. Fixed assets increased by 2.791 billion yen in tangible fixed assets due to the construction of the new factory, and investment securities increased by 212 million yen.
Total liabilities increased by 2.946 billion yen from the previous period to 20.097 billion yen. Interest-bearing liabilities increased by 2.202 billion yen due to borrowing for the construction of the new factory, and accounts payable and asset retirement obligations increased by 224 million yen and 204 million yen, respectively. Total net assets increased by the same 1.035 billion yen to 8.750 billion yen. Retained earnings increased by 883 million yen and other securities valuation reserve increased by 160 million yen.
In terms of financial indicators, although the equity ratio decreased by 0.7 points compared to the previous period due to the increase in interest-bearing liabilities, it was maintained in the 30% range. The net debt-to-equity ratio exceeded the target ratio of 1.0 at 1.09, and it is expected to gradually improve through earnings expansion in the future, as large funding needs have subsided.
(Written by FISCO guest analyst, Jo Sato)