Business Information
NPC Incorporated (TSE Growth 6255) April 12, 2024
INDEX
- Business Results for 1st Half of FY2024
- Revision of Business Forecasts for FY2024 Full Year
- Company Actions
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 1 |
Business Results for 1st Half of FY2024
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 2 |
Business Results for 1st Half of FY2024 | ||||||||||
Consolidated Statement of Income | (Million yen) | |||||||||
FY2023 1st Half | FY2024 1st Half | |||||||||
Results (A) | Initial forecast | Results | ||||||||
(As of Oct. 11, 2023)(B) | ||||||||||
Amount | Vs. Sales (%) | Amount | Vs. Sales (%) | Amount | Vs. Sales (%) | Vs. (A) (%) | Vs. (B) (%) | |||
Sales | 4,241 | 100.0 | 3,329 | 100.0 | 3,506 | 100.0 | (17.3) | 5.3 | ||
Gross profit | 690 | 16.3 | 877 | 26.3 | 1,173 | 33.5 | 70.0 | 33.8 | ||
SG&A expenses | 466 | 11.0 | 514 | 15.4 | 516 | 14.7 | 10.7 | 0.4 | ||
Operating income | 224 | 5.3 | 363 | 10.9 | 656 | 18.7 | 192.9 | 80.7 | ||
Non-operating income | 7 | 0.2 | 1 | 0.0 | 8 | 0.2 | 14.3 | 700.0 | ||
Non-operating expenses | 1 | 0.0 | 2 | 0.1 | 1 | 0.0 | 0.0 | (50.0) | ||
Ordinary income | 230 | 5.4 | 363 | 10.9 | 662 | 18.9 | 187.8 | 82.4 | ||
Extraordinary income | - | - | - | - | - | - | - | |||
Extraordinary loss | - | - | - | - | - | - | - | |||
Net income before tax | 230 | 5.4 | 363 | 10.9 | 662 | 18.9 | 187.8 | 82.4 | ||
Net income attribute to | 182 | 4.3 | 250 | 7.5 | 484 | 13.8 | 165.9 | 93.6 | ||
owners of the parent | ||||||||||
Note: Percentages at vs. (A) and (B) represent increase/decrease rate. |
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 3 |
Business Results for 1st Half of FY2024:
Details of the differences between the initial forecast and the results
Sales
Slightly exceeded the initial forecast.
-Booked the sales of large-scale project of PV module manufacturing equipment as planned. -Parts sales surpassed the initial plan. (170 million yen increase from the initial plan)
Gross profit
Gross profit rate increased by 7.2 percentage points from the initial forecast. (forecast: 26.3%→result: 33.5%) -Cost reduction led by the reduction of purchasing price and on-site optimization of operation expense -Profit rate improved by strong parts sales
SG&A expenses
Almost as expected though there were some increase or decrease depending on the category. -Increase factor: provision for bonuses
-Decrease factor: payroll and allowances (deviation from the personnel plan), R&D expenses (delayed procurement of prototype), travel and transportation expenses
Operating income, Ordinary income, and Net income attributable to owners of the parent
Income in each stages largely exceeded the initial forecast due to an increase of sales and profit rate.
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 4 |
Business Results for 1st Half of FY2024:
Machinery Business | (Million yen) | ||||||||
FY2023 1st Half | FY2024 1st Half | ||||||||
Results (A) | Initial forecast | Results | |||||||
(As of Oct. 11, 2023) (B) | |||||||||
Amount | Vs. Sales (%) | Amount | Vs. Sales (%) | Amount | Vs. Sales (%) | Vs. (A) (%) | Vs. (B) (%) | ||
Sales | 3,996 | 100.0 | 3,128 | 100.0 | 3,329 | 100.0 | (16.7) | 6.4 | |
Gross profit | 634 | 15.9 | 831 | 26.6 | 1,131 | 34.0 | 78.4 | 36.1 | |
SG&A expenses | 123 | 3.1 | 145 | 4.6 | 135 | 4.1 | 9.8 | (6.9) | |
Operating income | 511 | 12.8 | 686 | 21.9 | 995 | 29.9 | 94.7 | 45.0 | |
Note: There are company-wide expenses not included in the table above. Also, percentages at vs. (A) and (B) represent increase/decrease rate.
■Sales
The main business was with First Solar.
-Booked the sales of machines for additional installation (No.6.5) at First Solar's manufacturing facility in Ohio
-Alteration/upgrade of existing factory line executed
-Parts sales were strong due to high plant working rate and increase in amount of equipment.
■Gross profit
High profit rate was secured by cost reduction and increase in parts sales.
Sales breakdown
Automation
machines
Parts
PV module
manufacturing
equipment
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 5 |
Business Results for 1st Half of FY2024:
Environmental Business
(Million yen) | ||||||||
FY2023 1st Half | FY2024 1st Half | |||||||
Results (A) | Initial forecast | Results | ||||||
(As of Oct. 11, 2023) (B) | ||||||||
Amount | Vs. Sales (%) | Amount | Vs. Sales (%) | Amount | Vs. Sales (%) | Vs. (A) (%) | Vs. (B) (%) | |
Sales | 245 | 100.0 | 200 | 100.0 | 176 | 100.0 | (28.2) | (12.0) |
Gross profit | 55 | 22.4 | 46 | 23.0 | 41 | 23.3 | (25.5) | (10.9) |
SG&A expenses | 32 | 13.1 | 33 | 16.5 | 38 | 21.6 | 18.8 | 15.2 |
Operating income | 23 | 9.4 | 12 | 6.0 | 3 | 1.7 | (87.0) | (75.0) |
Note: There are company-wide expenses not included in the table above. Also, percentages at vs. (A) and (B) represent increase/decrease rate.
■Sales
-Solar power inspection service:
Continued to provide services mainly to the existing customers. -Solar panel disassembly equipment:
Booked the sales of frame & J-Box separator to 3 domestic customers. Sales planned
to the overseas customers were pushed back to FY2024 2nd half due to customer reason. -Panel reuse and recycling
Booked the sales as planned but remained low. -Plant factory business:
The factory is in full production and almost all the products were sold out.
■Gross profit
The profit rate was as expected, however, the gross profit decreased since the sales target was not achieved.
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved.
Sales breakdown
Plant factory business
Solar power plant inspection service
Solar panel disassembly equipment
Reuse and recycling of solar panels (intermediate treatment)
6
Business Results for 1st Half of FY2024:
Orders / Order Backlog
(Million yen) |
Machinery business
Environmental business
Total
FY2023 1st half
Orders received | Order backlog |
8,057 | 12,005 |
261 | 500 |
8,318 | 12,506 |
FY2024 1st half | |||
Orders received | Year-on-year | Order backlog | Year-on-year |
ratio(%) | ratio(%) | ||
6,777 | (15.9) | 13,401 | 11.6 |
324 | 24.1 | 469 | (6.2) |
7,102 | 14.6 | 13,870 | 10.9 |
Note: Percentages represent increase/decrease rate. |
Machinery business
Orders were solid for FY2025.
-PV module manufacturing equipment for First Solar's Louisiana factory (No.9) -Additional equipment for First Solar's existing factory line (No.6, 7, 8)
-Delayed order of automation machines for new factory of domestic electronic components industry was received. -Alteration project for domestic PV manufacturer -Automation machines for domestic and US automobile industry
Environmental business
-Stably received orders for solar panel inspection service and plant factory business from existing customers.
-Orders for panel disassembly equipment was steady. Panel disassembly line: 2 lines (Czech Republic, Japan)
Frame & J-Box separator: 2 sets (France, Japan)
Orders Breakdown
Machinery business
AutomationParts machines
PV module manufacturing equipment
Environmental | |
business | Solar panel |
Plant factory | inspection service |
business
Reuse/recycling of
Solar panel disassembly solar panels
equipment(intermediate treatment)
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 7 |
Business Results for 1st Half of FY2024:
Balance Sheet | (Million yen) | |||||||||||
2023.8E | 2024.2E | 2023.8E | 2024.2E | |||||||||
Assets | 13,611 | 14,177 | Liabilities | 5,537 | 5,711 | |||||||
Current assets | 9,963 | 10,623 | Current liabilities | 5,463 | 5,632 | |||||||
Accounts payable-trade | ||||||||||||
Cash and deposits | 4,880 | 4,662 | /electronically recorded obligations- | 2,445 | 1,797 | |||||||
operating | ||||||||||||
Notes and accounts receivable-trade | ||||||||||||
/electronically recorded monetary claims- | 1,262 | 1,159 | Advances received | 2,474 | 3,305 | |||||||
operating | ||||||||||||
Work in progress | 3,578 | 4,452 | Provisions | 155 | 147 | |||||||
Raw materials and supplies | 11 | 23 | Other | 389 | 383 | |||||||
Other | 232 | 325 | Noncurrent liabilities | 73 | 79 | |||||||
Noncurrent assets | 3,647 | 3,553 | Net assets | 8,074 | 8,465 | |||||||
Property, plant and equipment (net) | 1,630 | 1,552 | Capital stock, capital surplus | 5,547 | 5,550 | |||||||
Land | 1,548 | 1,548 | Retained earnings | 2,739 | 3,095 | |||||||
Other | 469 | 453 | Treasury stock | (320) | (306) | |||||||
Other | 108 | 126 | ||||||||||
Factors for changes and financial soundness
-Net assets remained at a high level due to expansion of business
-Work in progress is increasing as the production is progressing towards sales booking for 2nd half of FY2024 -Advances for booked sales were certainly received.
-Equity ratio: 59.7%
8
Revision of Business Forecasts for FY2024 Full Year
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 9 |
Revision of Business Forecasts for FY2024 Full Year
Consolidated Statement of Income
(Million yen)
FY 2023 | FY 2024 | |||||||||
Results (A) | Initial forecast | Revised forecast (As of April 10, 2024) | ||||||||
(As of Oct. 11, 2023) (B) | ||||||||||
Amount | Vs. Sales | Amount | Vs. Sales (%) | Amount | Vs. Sales (%) | Vs. (A) (%) | Vs. (B) (%) | |||
(%) | ||||||||||
Sales | 9,320 | 100.0 | 10,384 | 100.0 | 10,995 | 100.0 | 18.0 | 5.9 | ||
Gross profit | 1,944 | 20.9 | 2,615 | 25.2 | 3,270 | 29.7 | 68.2 | 25.0 | ||
SG&A expenses | 967 | 10.4 | 1,030 | 9.9 | 1,121 | 10.2 | 15.9 | 8.8 | ||
Operating income | 976 | 10.5 | 1,584 | 15.3 | 2,149 | 19.5 | 120.2 | 35.7 | ||
Non-operating income | 6 | 0.1 | 3 | 0.0 | 10 | 0.1 | 66.7 | 233.3 | ||
Non-operating expenses | 20 | 0.2 | 4 | 0.0 | 3 | 0.0 | △85.0 | △25.0 | ||
Ordinary income | 963 | 10.3 | 1,584 | 15.3 | 2,155 | 19.6 | 123.8 | 36.0 | ||
Extraordinary income | - | - | - | - | - | - | - | - | ||
Extraordinary loss | - | - | - | - | - | - | - | - | ||
Net income before tax | 963 | 10.3 | 1,584 | 15.3 | 2,155 | 19.6 | 123.8 | 36.0 | ||
Net income attribute to | 993 | 10.7 | 1,081 | 10.4 | 1,471 | 13.4 | 48.1 | 36.1 | ||
owners of the parent |
Note: Percentages at vs. (A) and (B) represent increase/decrease rate.
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 10 |
Revision of Business Forecasts for FY2024 Full Year:
Summary
Sales
10,384 million yen→10,995 million yen
-Have already received the orders for most of the sales expected for the 2nd half, except for parts sales.
-A part of sales of automation machines to domestic electronic components industry is expected to be pushed forward to FY2024 from FY2025, according to the customer's request.
-Parts sales are strong; expecting briefly the same amount of sales with FY2023. (757 million yen)
-Expecting to book sales of equipment for First Solar's Alabama manufacturing facility (No.8) in FY2024 Q4.
Gross profit
2,615 million yen→3,270 million yen, gross profit rate: 25.2%→29.7% -Increase of profit due to increase of sales.
- Profit rate is improving due to the cost reduction of purchasing cost and on-site operation expense, and to an increase of parts sales.
SG&A expenses
1,030 million yen→1,121 million yen
-Provision for bonuses is increased along with the increase of profit.
-Welfare expenses, R&D expenses, commission expenses, etc. are expected to increase.
Operating income, Ordinary income, and Net income attributable to owners of the parent
-Each income is expected to largely surpass the initial forecast due to an increase of gross profit , despite an expected increase in SG&A expenses
- Net income attribute to owners of the parent: 1,081 million yen→1,471 million yen (390 million yen increase)
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 11 |
Company Actions
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 12 |
Machinery Business 1. PV Module Manufacturing Equipment:
PV Market
Generation cost of solar power generation in the world
-Generation cost of solar power generation has largely decreased in the past 12 years.
-In 2022, generation cost of solar power generation went below that of fossil fuel generation by marking the minimum of $0.049/kWh, while fossil fuel generation was at the minimum of $0.069/kWh.
Source: IRENA (2023) Renewable power generation costs in 2022.
Changes in the Cost of | ||||||||
($/KWh) | Solar Power Generation in the World | |||||||
0.5 | ||||||||
0.445 | ||||||||
0.4 | ||||||||
0.3 | 0.244 | |||||||
0.2 | ||||||||
Cost range of fossil fuel | ||||||||
0.1 | generation | |||||||
0.069 | ||||||||
0 | 0.049 | (CY) | ||||||
2010 | 2022 | |||||||
Generation cost of solar power generation in the US
($/MWh)
Minimum Generation Cost in the US
-Minimum generation cost (without subsidy) of utility-scale solar power
in the US is $24/MWh ($0.024/kWh).
-On the other hand, coal-fired power generation costs
$68/MWh ($0.068/kWh).
Source: LAZARD (2023) 2023 Levelized Cost of Energy+.
80 | 68 |
70 | |
60 | |
50 | |
40 | 24 |
30 | |
20 | |
10 | |
0 |
Solar power generation | Coal-fired power generation |
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 13 |
Machinery Business 1. PV Module Manufacturing Equipment:
PV Market
Non-federal solar power initiatives in the US
-12states and 3 districts* have legislated to transit to 100% clean energy by 2050 at the latest. (Includes 5 states and districts that will transit to 100% renewable energy.)
-Many of the major corporations in the US invests or own solar power plants or use PV panels on the rooftop of their properties.
100% renewable: Hawaii, Rhode Island, Washington DC, Guam, Puerto Rico
100% clean: California, Connecticut, Illinois, Maine, Michigan, Minnesota, Nevada, New Mexico, New York, Oregon, Virginia, Washington
Meta:
By 2025, 86 Meta-supported wind and solar projects in the U.S. will add 9.8 GW of renewable energy to local grids across 24 states.
Costco Wholesale
Costco owns and operates more than 100 on-site solar systems, with the intention to expand on-site solar operations where feasible.
Source: Meta. 'Energy'. | ||
Source: Environment + Energy Leader (2023) 'Costco Is Cutting Its CO2 Footprint By Greening Its Energy | ||
Supply and Using Energy Efficiency'. | ||
Source: National Conference of State Legislatures (2021) 'State Renewable Portfolio Standards and Goals'. | ||
出典/Environment America (2022) 'States can lead the way toward a future powered by 100% clean, | PV panels used for the car port, Costco, Maui Island, Hawaii | |
renewable energy'. | ||
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 14 |
Machinery Business 1. PV Module Manufacturing Equipment:
Current Status of First Solar
Current status of First Solar
2022 | 2023 | 2024E | Order backlog | 80.1 GW | ||
Sales (USD) | 2.6 bill. | 3.3 bill. | 4.4~4.6 bill. | In negotiation | 66.5 GW | |
Operating income (USD) | △0.02 bill. | 0.85 bill. | 1.5~1.6 bill. | |||
Total | 146.6 GW | |||||
Shipment (GW) | 9.3 | 14.5 | 15.6~16.3 | |||
First Solar's capital investment
(GW) | First Solar's Nameplate Manufacturing Capacity | |
30 | ||
25.2 | ||
25 | 21.2 | 22.5 |
- 16.6
0
2023A | 2024E | 2025E | 2026E |
Source: First Solar (2024) First Solar Q4'23 Earnings and 2024 Guidance Call.
Source: Fist Solar (2023) First Solar Breaks Ground on $1.1 Billion, 3.5 GW Louisiana Manufacturing Facility.
Ground-breaking at the new manufacturing facility in Louisiana (No.9)
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 15 |
Machinery Business 1. PV Module Manufacturing Equipment:
Business with First Solar
■New equipment (equipment for new manufacturing facilities, R&D equipment)
Factory | Location | Production capacity(GW) | Start operation | Business |
Equipment already installed | ||||
0-5 (existing) | Ohio, Malaysia, Vietnam | 9.8 | In operation | Continuous business of |
upgrading and expansion | ||||
6 (existing) | Ohio | 3.3 | In operation | Sales booked (FY2023 2Q) |
7 (existing) | India | 3.3 | In operation | Sales booked (FY2023 4Q) |
6.5(expansion) | Ohio | 0.9 | 2024 | Sales booked (FY2024 2Q) |
8 | Alabama | 3.5 | 2024 | Order received (FY2023 1Q) |
Sales scheduled (FY2024 4Q) | ||||
R&D Center | Ohio | Silicone and thin-film tandem | 2024 | Order received (FY2023 2Q) |
module R&D line | Sales scheduled (FY2024 3Q) | |||
R&D Center | Ohio | Perovskite development | 2025 | Order received (FY2023 4Q) |
equipment | Sales scheduled (1st half of FY2025) | |||
9 | Louisiana | 3.5 | 2026 | Order received (FY2024 1Q) |
Sales scheduled (2nd half of FY2025) | ||||
■Alteration/upgrade of installed equipment
-Continuing businesses such as alterations of the equipment due to change of design of the products, upgrading equipment to improve production yields by automating processes or adding inspection processes, in all the manufacturing facilities.
■Parts Sales
-Dealings of consumable parts and spare parts for equipment.
-Sales are on the rise since the equipment and modification/upgrade is increasing and plant working rate is high. | |||
-FY2022:454 million yen | FY2023:746 million yen | FY2024 (forecast):745 million yen | |
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 16 |
Machinery Business 1. PV Module Manufacturing Equipment:
Perovskite PV module
Demands for perovskite and future prospects
- Backgrounds of demand
-Acquisition of installation sites are necessary because Japan does not have many flat lands.
-Can utilize iodine without depending on other countries.
-Prime minister Kishida has announced that the government is "aiming to start practical use in 2025". Development budget have risen to 64.8 billion yen.
■Future prospects
-Solving the issue of durability
→Sekisui Chemical has announced that it is targeting to
achieve durability around 20 years by 2025. -Mass production plan
→Sekisui Chemical has also announced that it is planning to mass
(KW/㎢) | PV capacity per square meter of land area | |||||||
426 | ||||||||
450 | ||||||||
400 | ||||||||
350 | ||||||||
300 | ||||||||
250 | ||||||||
184 | ||||||||
200 | ||||||||
150 | ||||||||
100 | 63 | 26 | 24 | |||||
50 | 11 | 10 | ||||||
0 | ||||||||
Japan Germany | UK | France | China | India | US | |||
produce several hundred thousand square meters annually. It will Source: Ministry of Trade, Economy and Industry (2021) 'The state of energy policy toward 2030'.
clarify the amount of production within 2 years.
Our Approach
Our strength: we can utilize the experience of producing thin film solar panel manufacturing equipment (electrode formation process, sheet layering process, lamination process, etc.)
-Received order of equipment from First Solar for pursuing R&D of perovskite PV module which they acquired knowledge though M&A -Received total order of several billion yen from multiple domestic companies.
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 17 |
Machinery Business
2. Automation Machines
Current status of automation machines
(Million yen) | Orders | (Million yen) | Sales | ||||||||
1,500 | 1,500 | ||||||||||
1,000 | 1,000 | ||||||||||
500 | 500 | ||||||||||
0 | 0 | ||||||||||
2021 | 2022 | 2023 | 2024E | 2021 | 2022 | 2023 | 2024E |
Sales for FY2024 decreased due to the back push of the sales of the equipment for the new factory of the domestic electronic component manufacturer being affected by the situation of semiconductor market. It is forecasted to recover from FY2025 onwards.
Acquirement of regular customer in the US
■Market environment
-Demand for automation machines is high in the US due to issues such as labor cost. -We compete with local manufacturers on cost and customer support.
■Our actions
-Strengthen sales mainly to automobile related companies from our subsidiary
in Michigan.
-Support sales by dispatching engineers from Matsuyama factory.
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 18 |
Machinery Business
3. Production System and Status of Matsuyama Factory
Breakdown of consolidated employees (As of
August 31, 2023)
Administration Development/
37design
42
Inspection, etc.
8 Manufacturuing
51
Approximately 3/4 work as
technical staff
■Production System
It is possible to outsource the assembly process since we are producing equipment with cell production system.
We can be flexible about the production system depending on the amount of orders.
-Continuously having business with mainly 3 subcontracting companies, have multiple other companies we can outsource.
-Final adjustments are done at the Matsuyama factory after equipment is assembled at subcontracting companies, and shipped to the customers. (In some cases, we ship directly to customers.)
■Personnel organization
-51 technicians are responsible for assembly and wiring in equipment manufacturing
-42 designers (mechanical, electrical, and software) on staff, with plans to increase the number of designers in the future
Copyright Ⓒ 2024 NPC Incorporated. All rights reserved. | 19 |
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Disclaimer
NPC Inc. published this content on 12 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 April 2024 03:10:05 UTC.