■Performance Trends of Baltes Holdings＜4442＞
1. Financial Summary for the Fiscal Year Ending March 31, 2024
(1) Profit and loss situation
As for the consolidated financial results for the fiscal year ending 2024/3, sales were 10,362 million yen (up 14.4% from the previous fiscal year), operating profit was 840 million yen (down 13.3% from the same period), ordinary profit was 850 million yen (down 13.5% from the same period), and net income attributable to parent company shareholders was 518 million yen (down 20.5% from the same period). As of the second quarter of the fiscal year ending 2024/3, an increase in operating profit was anticipated, but internal systems could not keep up with the company's growth, and some of the expected projects were out of order in the second half of the year, and profit declined throughout the year.
According to the main KPIs, the “monthly unit price (software testing)” was 765,000 yen (25,000 yen increase from the previous fiscal year), the number of projects during the period was 4,529 (661 increase compared to the previous fiscal year), and the number of operating engineers at the end of the fiscal year was 1,222 (65 increase in total employees and business partners, 144 increase in regular employees*), all of which reached record highs.
*As the project progresses, the number of contract employees and business partners may decrease.
The gross profit margin declined to 28.9% (29.8% in the previous fiscal year), but this was due to a temporary decline in profitability since many engineers were hired at the beginning of the fiscal year, and according to the company, “profit margins for individual projects have not declined.” Meanwhile, SG&A expenses increased 24.2% from the previous fiscal year due to increased recruitment and business expansion. The breakdown of the increase in SG&A expenses was a 158 million yen increase in personnel costs (increase in the number of people due to strengthening management departments such as recruitment teams, sales, etc.), an 86 million yen increase in recruitment costs (increase in fees, recruitment service usage fees, and recruitment advertisements associated with an increase in the number of hires), an increase in research and development expenses by 54 million yen (increase in in-house tool development investment, increase in metaverse R&D investment), and an increase in others (increase in M&A expenses, increase in investment costs, increase in in-house developed tool advertisements).
Analyzing the factors behind the increase or decrease in operating income, the increase in profit due to the increase in sales was 388 million yen (of which the software test service business increased by 259 million yen, the web/mobile application development service business increased by 132 million yen, the offshore service business decreased by 2 million yen), and the decrease in gross profit margin (mainly increase in fixed costs associated with business site expansion and relocation, increase in man-hours associated with larger development projects, etc.) was 98 million yen (of which the software test service business increased 78 million yen, Web/ The mobile application development service business decreased by 145 million yen, the offshore service business decreased by 31 million yen), and the decrease in profit due to an increase in sales and administration expenses was 419 million yen (breakdown was an increase in labor costs of 158 million yen, an increase of 86 million yen in recruitment costs, an increase of 54 million yen in research and development expenses, and an increase of 120 million yen in others).
(Written by FISCO Visiting Analyst Noboru Terashima)