Kaga Electronics Co (8154) Q2 2025 earnings summary

Executive summary

• First-half FY2025/3 net sales fell 5.8% YoY to ¥259,064 million; operating income declined 17.1% to ¥11,501 million and profit attributable to owners of parent fell 30.4% to ¥7,941 million, mainly due to inventory adjustments and lower transactions with a major overseas customer.

• Gross profit margin improved 0.4 percentage points to 13.2%, partly because lost transactions were lower-profitability business.

• First-half net sales and operating income exceeded internal plans.

Financial highlights

• Ordinary income decreased 19.1% YoY to ¥11,278 million; EPS was ¥151.15, reflecting the two-for-one stock split.

• SG&A expenses rose 6.3% YoY, mainly due to wage increases and logistics costs.

• Exchange rates positively affected net sales by ¥7,992 million and operating income by ¥253 million; foreign exchange losses reduced ordinary income by ¥0.7 billion YoY.

• Total assets were ¥289,122 million and net assets ¥159,214 million as of September 30, 2024; the equity ratio was 55.0%.

Outlook and guidance

• FY2025/3 forecasts remain unchanged: net sales ¥555,000 million, operating income ¥26,000 million and profit attributable to owners of parent ¥18,000 million.

• Full-year EPS is forecast at ¥342.53; annual dividend is projected at ¥110 per share on a post-split basis.

• Management expects inventory adjustments to ease gradually in the second half and demand to recover.

• Medium-Term Management Plan 2027 targets net sales of ¥800 billion and operating income of ¥36 billion by FY2028.