KFC (3420) Q2 2025 earnings summary

Executive summary

• Revenue for the second quarter of FY2025 increased by 7.6% year-over-year to ¥11.67 billion, driven by steady public investment, highway renewal, and improved sales in key segments.

• Ordinary profit declined by 57.9% year-over-year to ¥130 million, and operating profit fell 73.5% to ¥74 million, mainly due to higher cost ratios and increased SG&A expenses.

• Net profit attributable to shareholders dropped 55.7% to ¥95 million.

• The company maintains its full-year forecast: revenue of ¥26 billion (+3.7% YoY), operating profit of ¥1.3 billion, and ordinary profit of ¥1.4 billion.

• The new mid-term plan (FY2025–FY2027) targets revenue of ¥27 billion and ordinary profit of ¥1.6 billion by FY2027, focusing on DX, human capital, and growth investments.

Financial highlights

• Segment revenue: Fastener business ¥3.31 billion (+0.2% YoY), Civil engineering materials ¥3.95 billion (+6.7% YoY), Construction business ¥4.88 billion (+14.7% YoY).

• Segment ordinary profit: Fastener ¥121 million (-43.9% YoY), Civil engineering materials ¥245 million (+239.6% YoY), Construction -¥228 million.

• Gross profit was ¥2,763 million, down from ¥2,831 million year-over-year.

• Cash and equivalents at period end: ¥3.59 billion, down ¥2.49 billion from the previous year.

• EPS for the period was ¥12.93, compared to ¥29.20 in the prior year.

Outlook and guidance

• Revenue growth expected from steady construction backlog and expansion into new seismic reinforcement markets.

• Profitability to remain under pressure due to high raw material and logistics costs, and increased investment in mid-term plan initiatives.

• No revision to full-year guidance; annual dividend forecast is ¥60 per share.

• Mid-term plan aims for capital efficiency improvement and long-term corporate value enhancement.