MEITEC (9744) Q2 2027 earnings summary

Executive summary

• H1 FY2027 net sales rose 0.6% YoY to ¥68.761bn and operating profit rose 1.0% to ¥10.163bn; profit attributable to owners fell 47.3% to ¥3.652bn, mainly due to facility-related losses.

• Sales growth slowed amid lower engineer headcount and shorter working hours; operating profit exceeded forecast on SG&A control, while sales and net profit fell short.

• FY2027 guidance targets higher sales and operating profit, while forecast profit attributable to owners was cut to ¥11.0bn following extraordinary losses.

Financial highlights

• Consolidated net sales were ¥68.761bn, up ¥409m (+0.6%) YoY and ¥739m below the initial forecast.

• Operating profit was ¥10.163bn, up 1.0% YoY and ¥663m above forecast; operating margin was 14.8%, up 0.1 percentage point. Ordinary profit rose 1.2% to ¥10.291bn.

• Profit attributable to owners fell 47.3% to ¥3.652bn, ¥2.848bn below forecast; basic EPS was ¥47.30 versus ¥89.80.

• Gross profit rose to ¥18.551bn; cost of sales increased 0.2% to ¥50.210bn and SG&A rose 2.3% to ¥8.387bn, ¥813m below initial forecast.

• Profit before income taxes declined 30.9% to ¥7.022bn; comprehensive income was ¥3.583bn versus ¥6.887bn.

Outlook and guidance

• FY2027 forecast: net sales ¥138.8bn (+0.8% YoY), operating profit ¥20.8bn (+4.5%), operating margin 15.0%, and ordinary profit ¥21.0bn (+4.5%).

• Profit attributable to owners is forecast at ¥11.0bn, down 26.9% YoY, with EPS of ¥142.47; the profit forecast was cut ¥2.9bn from initial guidance.

• Versus initial guidance, annual sales were reduced by ¥2.0bn and operating profit raised ¥300m; lower engineer headcount and working hours weigh on sales.

• Second-half forecast: sales ¥70.039bn, operating profit ¥10.637bn and profit attributable to owners ¥7.348bn.

• Guidance was revised after reassessing key Engineering Solutions Business indicators against prevailing trends.