NEC Corporation has released its consolidated financial results for the fiscal year ending on March 31, 2024. The results surpassed expectations across the board due to the increasing popularity of a high-performing generative AI Large Language Model (LLM) and progress towards achieving the goals outlined in the Mid-term Management Plan 2025.
Net Revenue
The consolidated financial results demonstrate NEC Corporation's strong performance across various financial metrics. The revenue increased by 5.0% compared to the previous year, reaching JPY 3,477,262 million, indicating growth in NEC Corporation's core business activities. This growth in revenue contributed to an operating profit of JPY 188,012 million, marking a 10.3% increase year-on-year, highlighting NEC Corporation's effective cost management and operational efficiency. Similarly, profit before income taxes also saw a 10.3% rise, reaching JPY 185,011 million, showcasing NEC Corporation's ability to generate profits before accounting for taxes.
Net Profit
Net profit for the year experienced a significant surge of 25.3%, totaling JPY 164,752 million, indicating NEC Corporation's strong bottom-line performance and profitability. This increase in net profit was even more pronounced when considering the net profit attributable to owners of the parent, which soared by 30.6% to JPY 149,521 million, reflecting the enhanced value delivered to NEC Corporation's shareholders. The total comprehensive income for the year saw a substantial increase of 74.1% compared to the previous year, amounting to JPY 342,508 million, suggesting a comprehensive improvement in NEC Corporation's financial position and performance.
Basic Earnings Per Share
Basic earnings per share rose notably by 32.1% to JPY 561.25, indicating the increased earnings generated per share of NEC Corporation's stock. The financial position of NEC Corporation as of March 31, 2024, remained robust, with total assets reaching JPY 4,227,514 million and total equity attributable to owners of the parent standing at JPY 1,915,613 million, resulting in a healthy equity ratio of 45.3%. Furthermore, NEC Corporation maintained a strong cash position, with cash and cash equivalents totaling JPY 476,490 million, providing liquidity for future investments and operations.
Cash Flow
Cash flow from operating activities remained strong at JPY 271,228 million, reflecting NEC Corporation's ability to generate cash from its core business operations. However, cash flow from investing activities resulted in an outflow of JPY 76,015 million, primarily due to investments in assets such as property, plant, and equipment. Similarly, cash flow from financing activities also experienced an outflow of JPY 155,508 million, mainly attributed to debt repayment, dividend payments and lease liabilities.
Fiscal Year (2025)
Looking ahead to the fiscal year ending March 31, 2025, NEC Corporation forecasts a slight decrease in revenue to JPY 3,370,000 million, potentially influenced by various market factors and strategic decisions. However, NEC Corporation anticipates an increase in adjusted operating profit to JPY 255,000 million, indicating continued profitability and operational efficiency. Despite this positive outlook, NEC Corporation expects a decline in non-GAAP profit attributable to owners of the parent by 7.2%, totaling JPY 165,000 million, potentially due to factors such as increased expenses and changes in market conditions.
Forward-Looking Statements
Furthermore, NEC outlined forward-looking statements regarding the NEC Group's operations and financial conditions, based on current information and reasonable assumptions. The group indicated that these statements are subjective and uncertain, and actual results may vary due to factors such as economic conditions, currency exchange rates, market changes, and the impact of infections. Other risks include challenges in achieving goals, technological advancements, competition, customer base concentration, intellectual property issues, financial difficulties, regulatory changes, environmental concerns, and unforeseen events like natural disasters and terrorism, all of which could affect the NEC Group's performance.
Takayuki Morita, President and CEO of NEC Corporation, expressed his gratitude for the ongoing support from all stakeholders, including customers, employees, and shareholders. He credited this success to their trust and dedication. Morita also reiterated NEC's commitment to driving transformation and fulfilling its mission of creating social values such as safety, security, fairness and efficiency.