Nidec (6594) Q2 2026 earnings summary

Executive summary

• Net sales for the first half of FY2025 reached ¥1,302.3 billion, up 0.7% year-over-year, but operating profit dropped sharply by 82.5% to ¥21.1 billion due to significant one-time losses, impairments, and contract loss provisions, with ongoing investigations into inappropriate accounting practices.

• Share price designated as a security on special alert by the Tokyo Stock Exchange; received a disclaimer of opinion from auditors, and a Third-Party Committee was established to investigate accounting issues.

• Corporate Reform Committee and compliance initiatives launched to address governance and cultural reforms, with ongoing cooperation with investigators.

• Cash generation remained robust, with cumulative net cash from operating activities at ¥112.3 billion and free cash flow at ¥45.2 billion for the first half.

• Net loss attributable to owners was ¥9,383 million in Q1 FY2025, compared to a profit of ¥55,987 million a year earlier.

Financial highlights

• Net sales increased by ¥8.5 billion year-over-year to ¥1,302.3 billion for the first half, but operating profit fell from ¥120.5 billion to ¥21.1 billion, with the operating profit ratio declining from 9.3% to 1.6%.

• Major losses included ¥36.5 billion for contract loss provisions, ¥31.7 billion in impairment losses, and ¥19.5 billion in supplier reimbursement claims.

• Free cash flow for the first half was ¥45.2 billion, up from ¥28 billion year-over-year.

• Operating margin dropped to -4.1% in Q1 FY2025 from 9.3% a year ago.

• EPS decreased from ¥65.59 to ¥27.21, and no interim dividend was paid.

Outlook and guidance

• No interim or year-end dividend forecast due to inability to fix dividend amounts amid ongoing investigations; full-year earnings guidance remains undetermined.

• Midterm management plan remains in place, but numbers are under review; focus on restructuring and integration of business units.

• Capital expenditure plans, including investments in India, remain unchanged, but projects may be postponed to preserve cash if necessary.