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OKI posts strong gains despite challenges

November 11, 2024

Revenue surges as enterprise demand grows, but EMS sector faces headwinds.

OKI Electric reported strong financial results for the first half (1H) of fiscal year 2024, marking a 13% year-over-year (YOY) growth in revenue to ¥197.7 billion ($1.32 billion/ €1.25 billion) and a remarkable six-fold increase in operating income to ¥6.2 billion ($41.4 million/ €39.1 million). Buoyed by large-scale projects and cost-cutting measures, the company’s enterprise solutions sector was the main driver of growth, offsetting slower performance in other segments.

The revenue gains are largely attributed to OKI’s Enterprise Solutions division, which supplies hardware, software, and support services for a range of large-scale technology projects. This segment’s revenue rose by a staggering 36% to ¥87.1 billion ($582 million/ €549 million), and operating income nearly tripled, climbing to ¥11.3 billion ($75.5 million/ €71.2 million). OKI attributed this performance to sustained demand in sectors such as infrastructure and telecommunications, coupled with improvements in material costs and supply chain efficiency.

However, the company’s EMS (Electronics Manufacturing Services) division faced significant hurdles. Revenue fell 11% to ¥32.4 billion ($216 million/ €204 million) amid ongoing weakness in the semiconductor and industrial automation markets. EMS operating income took a marked downturn, dropping from ¥0.9 billion ($6.02 million/ €5.68 million) in 1H FY2023 to a ¥1 billion loss ($6.6 million/ €6.3 million). Management cited the “persistent demand downturn” as a primary factor impacting the division’s profitability, with little immediate improvement anticipated.

Despite these strong 1H results, OKI maintained a cautious full-year forecast of ¥460 billion ($3.07 billion/ €2.91 billion) in revenue, citing uncertainties in global demand and market conditions. The outlook for the EMS division, in particular, remains challenging, with revised forecasts reflecting lower revenue expectations.

Categories : City News

Tags : Business Financials Forecast OKI revenue Technology

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