NGK Insulators (5333) Q2 2025 earnings summary

Executive summary

• Net sales for FY2024 1H reached ¥298.4B, up 5.5% year-over-year, with record-high sales for the second quarter, driven by strong Digital Society and Energy & Industry segments and yen depreciation.

• Operating income rose 22% to ¥39.7B, and net income attributable to owners increased 42% to ¥25.9B year-over-year.

• Growth was led by robust demand for semiconductor equipment and HDD actuators, while automotive-related shipments declined.

• The company revised up its full-year operating and ordinary income forecasts, maintaining net income guidance due to impairment losses in the package business.

Financial highlights

• FY2024 full-year net sales forecast at ¥620.0B, up 7% year-over-year; operating income forecast at ¥78.0B, up 17%.

• Net income forecast at ¥53.0B, a 31% increase year-over-year, with EPS forecast at ¥179.41.

• Gross profit increased to ¥85.6B from ¥74.9B year-on-year.

• Interim dividend set at ¥30 per share, with full-year forecast at ¥60 per share; payout ratio targeted at 30%.

• Free cash flow expected to remain positive despite aggressive investment in growth domains.

Outlook and guidance

• Sales and income projected to increase year-over-year, with improved profitability from cost reductions and price hikes in automotive products.

• Semiconductor and data center demand expected to drive further growth in Digital Society segment.

• Energy & Industry segment loss to widen due to higher material costs for NAS® batteries, despite higher sales.

• Assumed exchange rates for H2: ¥140/USD and ¥155/EUR.