Nippon Light Metal Holdings Company (5703) Q2 2027 earnings summary

Executive summary

• H1 FY2027 net sales rose 21.2% YoY to ¥337.8bn; operating profit increased 83.5% to ¥21.4bn, ordinary profit 107.0% to ¥20.2bn and parent-attributable profit 110.8% to ¥11.5bn.

• FY2027 guidance was revised to net sales ¥700.0bn, operating profit ¥37.0bn, ordinary profit ¥35.0bn and parent-attributable profit ¥20.0bn.

Financial highlights

• H1 gross profit rose to ¥60.9bn from ¥48.5bn; SG&A increased to ¥39.5bn from ¥36.9bn.

• Ordinary-profit drivers included sales changes +¥8.0bn, growth products +¥2.1bn, sales prices +¥4.2bn and aluminum-ingot-related gains +¥4.4bn; fixed costs were a ¥4.5bn headwind.

• Total assets increased ¥27.1bn to ¥583.4bn from FY2026 year-end; inventories rose ¥18.4bn to ¥128.6bn and borrowings increased ¥15.5bn to ¥181.5bn.

• Operating cash flow was ¥15.4bn versus ¥23.1bn; investing cash outflow was ¥13.5bn versus ¥11.8bn. Free cash flow fell as ingot prices lifted working capital and fixed-asset spending rose.

Outlook and guidance

• FY2027 guidance is net sales ¥700.0bn (+19.6% YoY), operating profit ¥37.0bn (+44.4%), ordinary profit ¥35.0bn (+48.0%) and parent-attributable profit ¥20.0bn (+28.3%); forecast EPS is ¥324.57.

• Revised guidance compares with prior forecasts of ¥690.0bn sales, ¥33.0bn operating profit and ¥31.0bn ordinary profit; H2 profit is expected below H1 as ingot-price tailwinds ease.

• Secondary-alloy, semiconductor-related and LiB-sheet demand is expected to remain strong; price revisions should increasingly offset higher raw-material costs in H2.

• FY2027 dividend forecast is ¥110 per share: ¥50 interim and ¥60 year-end, up ¥30 from the prior year.