Shinwa (7607) investor relations material

Executive summary

• Consolidated revenue for the second quarter was ¥44.8 billion, up 6.1% year-over-year, driven by strong sales to the automotive sector and growth in smart factory innovation projects.

• Operating income rose 27.2% year-over-year to ¥2.9 billion, with gross profit margin improving to 17.0% (+0.85pt YoY) due to price adjustments and cost reductions.

• Net income increased 23.8% year-over-year to ¥2.05 billion; comprehensive income surged 123.1% to ¥3.8 billion.

• The Smart Factory Innovation Business and strong engineering capabilities drove growth, especially in Japan and Asia Pacific.

Financial highlights

• Revenue: ¥44.8 billion (+6.1% YoY); Gross profit: ¥7.6 billion (+11.7% YoY); Operating income: ¥2.9 billion (+27.2% YoY); Net income: ¥2.05 billion (+23.8% YoY).

• Ordinary profit reached ¥3.01 billion, up 22.2% year-over-year.

• Basic earnings per share rose to ¥153.14 from ¥123.86 a year earlier.

• Cash and cash equivalents at period-end decreased by ¥4.93 billion to ¥23.86 billion.

• Domestic sales accounted for 71.8% of total, with overseas sales at 28.2%.

Outlook and guidance

• Full-year revenue guidance maintained at ¥87 billion, with operating income forecast at ¥4.3 billion and net income at ¥3.1 billion.

• Full-year outlook unchanged due to geopolitical risks, raw material price increases, and logistics cost pressures.

• Interim dividend set at ¥62 per share; full-year dividend planned at ¥124 per share (payout ratio 53.6%).