Daiwa House Industry (1925) Q2 2027 earnings summary

Executive summary

• H1 FY2027 net sales rose 10.7% YoY to ¥2,912.7bn; Non-GAAP operating income rose 15.1% to ¥264.0bn and Non-GAAP net income rose 11.7% to ¥163.5bn.

• Reported operating income rose 13.3% to ¥250.9bn and net income attributable to owners rose 9.0% to ¥150.1bn; Logistics, Business & Corporate Facilities led segment profit growth.

• Logistics, Business & Corporate Facilities growth was supported by Semlinks, development-property sales and improved gross margins from pricing and cost-reduction actions.

Financial highlights

• Gross profit rose 11.6% to ¥602.1bn; gross margin was 20.7%, up 0.2pt, while SG&A increased 10.4% to ¥351.1bn.

• Non-GAAP operating margin increased to 9.1% from 8.7%; Non-GAAP net margin was 5.6%, unchanged YoY.

• Reported ordinary income was ¥227.4bn, up 10.8%; comprehensive income was ¥187.8bn versus ¥89.8bn, including ¥35.3bn of other comprehensive income.

• Operating cash flow was negative ¥69.3bn, improving from negative ¥79.2bn; investing cash outflow was ¥246.1bn and financing cash inflow was ¥458.0bn.

Outlook and guidance

• FY2027 guidance: sales ¥6,150bn, reported operating income ¥500bn, ordinary income ¥438bn and parent net income ¥287bn; Non-GAAP forecasts are ¥525bn, ¥467bn and ¥311bn, respectively.

• Guidance was revised based on Q2 results; increases from August guidance were ¥250bn for sales, ¥40bn for Non-GAAP operating income and ¥21bn for Non-GAAP net income.

• Overseas sales guidance was cut ¥70bn to ¥1,026bn amid market conditions; domestic facilities performance and additional development-property sales supported the overall increase.

• Non-GAAP ROE target is at least 10%; progressive dividend policy targets a payout ratio of at least 35% of annual Non-GAAP parent net income.

• Year-end dividend guidance is ¥47 per post-split share; annual dividend is ¥90 per post-split share, or ¥180 pre-split.