Nagano Keiki (7715) Q2 2025 earnings summary

Executive summary

• Net sales for Q2 FY 03/2025 increased 3.7% year-over-year to ¥35,631 million, with operating profit up 6.8% to ¥3,994 million and profit attributable to owners up 12.7% to ¥2,961 million, aided by a ¥305 million gain from business divestitures.

• Growth was driven by robust demand in the process industry, increased sales of pressure sensors for construction machinery, and expanded production capacity, while the semiconductor sector remained flat.

• Ordinary profit slightly decreased by 0.7% to ¥4,010 million due to lower dividend income, reduced equity method profit, and foreign exchange losses.

• Comprehensive income declined 13.2% year-over-year to ¥3,662 million.

• The company continues to execute its second medium-term business plan, focusing on strengthening its management base and enhancing corporate value.

Financial highlights

• Operating profit margin improved to 11.2% from 10.9% year-over-year.

• Gross profit increased to ¥11,509 million, offsetting higher costs of sales and increased SG&A expenses.

• Interim dividend of ¥24 per share (including a ¥2 special dividend) was declared, with an annual dividend planned at ¥46.

• Total assets rose to ¥76,167 million as of September 30, 2024, up ¥3,799 million from March 31, 2024.

• Equity-to-asset ratio improved to 56.5% from 54.9% at the previous fiscal year-end.

Outlook and guidance

• Full-year FY 03/2025 forecast remains unchanged: net sales of ¥70,700 million (+4.1% YoY), operating profit of ¥7,750 million (+8.4% YoY), ordinary profit of ¥7,600 million (+2.8% YoY), and profit attributable to owners of ¥5,500 million (+1.7% YoY).

• Earnings per share for the full year projected at ¥283.02.

• All major business segments are expected to see sales and profit growth, with the die casting segment forecasted to grow 9% in sales.

• Capital expenditures for FY 03/2025 are forecast at ¥2,740 million, with R&D expenses at ¥1,520 million.

• Uncertainty remains due to semiconductor market inventory adjustments and potential yen appreciation.