KVK Corporation (6484) Q2 2025 earnings summary

Executive summary

• Revenue for the first half of FY2025 was ¥14,224 million, down 2.9% year-over-year, while operating profit rose 7.3% to ¥1,183 million, and net profit increased 33.3% to ¥944 million.

• Economic normalization and inbound demand recovery supported a mild economic upturn, but the housing market remained challenging due to high prices and rising loan rates, leading to a decline in new housing starts year-over-year.

• Despite a sluggish housing market in Japan and China, profit margins improved due to a focus on profitable product lines and price increases.

• Focused on value-added product launches and overseas market expansion, including new compact faucets and participation in major trade shows in China.

• Enhanced production efficiency with new factory equipment and optimized layouts, supporting stable operations.

Financial highlights

• Operating profit margin improved to 8.3% from 7.5% year-over-year.

• Ordinary profit rose 24.8% to ¥1,405 million, and net profit margin increased to 6.6%.

• Cost of goods sold remained around 75% of sales; SG&A expenses were stable.

• Cash and equivalents at period-end increased by ¥1,343 million to ¥4,108 million.

• Comprehensive income was ¥683 million, down 35.3% year-over-year.

Outlook and guidance

• FY2026 targets: revenue of ¥36 billion, operating margin of 10%, and ROE of 10%.

• Full-year revenue forecast is ¥30,500 million (+2.4% year-over-year), with operating income of ¥2,600 million (+2.8%) and net income of ¥1,900 million (–4.1%).

• Strategic focus on strengthening sales and production bases, expanding overseas, and sustainability.

• No changes to previously announced guidance despite ongoing cost pressures and currency volatility.